As our population ages and life expectancy increases, the need for long-term care options is becoming more pressing. Long-term care can include in-home assistance, assisted living, and nursing home care. As the cost of long-term care continues to rise, senior citizens must carefully consider their options for funding this care. Understanding your options is the first step in creating a financial strategy to ensure that you or your loved one receives the proper care.
What is long-term care?
Long-term care provides services to people who need assistance with activities of daily living. This includes people who are unable to meet the physical, mental or emotional needs of daily life due to an illness, disability or age-related issues. This can include care for individuals who are physically or mentally incapacitated or cognitively impaired. Long-term care can also refer to services that help people stay in their homes. Services typically provided by long-term care include but are not limited to: transportation, meal preparation and delivery, housekeeping and laundry, personal care and dressing, shopping, errands and other forms of assistance.
Many individuals and couples must begin planning for long-term care costs before they become necessary. Planning ahead will help ensure that soon-to-be-needed services and supports can be obtained when the time comes.
How will I pay for long-term care?
For many individuals, there are a number of options available to help pay for long-term care, including self-funding and public and private insurance. The good news is that there are programs and policies in place to help soften the financial burden on seniors.
Self-funding, also referred to as self-payment, is when an individual uses his or her own assets to pay for long-term care. This can include liquid assets such as a savings account, or property such as a home. For couples, both individuals’ assets may be used to pay for long-term care services. It’s important to note that self-payment doesn’t guarantee that all long-term care costs will be covered.
Medicaid is a public health insurance program for individuals and families with limited assets and income. The amount of financial assistance that can be provided by Medicaid varies from state to state, as does eligibility criteria. To be eligible for Medicaid in most states, individuals must have an annual household income below a certain amount. Long-term care services that can be provided by Medicaid include home health care services and assisted living. In most states, individuals can access these services even if they have assets that exceed the state’s threshold.
- Long-Term Care Insurance
Long-term care insurance is a private insurance policy that covers long-term care services. Generally, long-term care insurance policies cover the services provided in a nursing home, assisted living, or home health care environment. Premiums for long-term care insurance policies vary depending on the age and health of the individual. Long-term care insurance policies are typically not available to individuals with existing health issues.
- Employer Benefits
Some employers offer long-term care benefits through their health insurance plans. It’s important to check with your employer to see if they have a policy that provides coverage for long-term care services. In some cases, these policies will provide a limited amount of coverage.
- Veterans Benefits
Veterans and their spouses may be eligible for long-term care benefits through the Department of Veterans Affairs (VA). VA benefits can provide up to a certain credit per day for nursing home care or in-home health care for veterans and their spouses. This amount is subject to change. To qualify for this benefit, individuals must meet certain criteria and must be able to provide proof of service.
Long-term care can be expensive and is often not covered by traditional health insurance plans. Before selecting a funding option for long-term care, it is important to consider all of the options available to you. Be sure to research any potential funding options and seek professional advice from an estate planning attorney like our team at Smith Barid, LLC or financial advisor. Long-term care planning should be a priority for all seniors and their families. Planning ahead can make a significant difference in ensuring that you and your loved ones are able to receive the quality of care they deserve.