The life expectancy for the average American is on the rise. Thanks to advances in medicine and pharmaceuticals American’s can expect to live to the ripe old age of 79 in 2016. By 2050 that average age is projected to increase to 83! With the rise in average age comes more demand for healthcare services. Consequently, seniors must now plan for long term care cost.
Long term care is expensive to be sure, but the cost can be controlled. Some money will have to come out of pocket. However, if planned the right way, long term care cost can be contained and resources preserved.
This post aims to shed light on long term care cost and give you some strategies for paying for it.
Long Term Care Is Inevitable
It is no longer a possibility that a senior will need long term care but an inevitability. According to the CDC, 1.4 million Americans over the age of 65 are currently using nursing home services. Another 4.9 million have utilized home care services and yet another 1.3 million are under the care of hospice. If you are a senior there chance is pretty good that you and your family will utilize the long-term care health care system. Yet most don’t plan for it.
The biggest concern most seniors should have when planning for retirement is paying for long term care. Costs can run anywhere from $500 to $14,000 a month depending on the type of care you need. That can shrink even the largest of nest eggs.
So how do seniors go about paying for long term care? Private-Pay or out-of-pocket is the obvious answer, but there are some other resources that can help supplement the enormous cost of aging.
The default medical insurance for seniors 65 and older covers hospital and acute care services but falls short when asked to cover long-term care at home or in a facility.
To Learn More About Medicare, visit Medicare.gov
Employer Based Insurance – Great for covering office visits and hospital stays. But also falls flat when reducing the cost of long-term care.
Learn More about Medigap Insurance plans from Medicare.gov
The default payor for long-term nursing home care has a big catch. You have to be indigent to use it. To complicate matters the five-year look back period makes planning difficult. The potential spend down of assets and the fear of losing their home keeps seniors and their families up at night.
Medicaid rules vary from State to State. Check with your State for eligibility rules. The posts listed below give some helpful tips about medicaid planning and how what medicaid covers.
- Medicaid Planning, What You Need To Know
- Medicaid Planning: What You Should Consider Before Starting
Long-Term Care Insurance
The insurance industry’s answer to the rise cost for senior care. The problem is that most people can’t afford it and only covers a fraction of the overall cost.
Veterans Aid and Attendance Benefit
An excellent benefit for those who have sacrificed for our countries freedom but asset limits and a notoriously inefficient application process make it difficult to access. However if qualified and properly submit the application, Veterans can get over $2,000 a month toward the cost of long term care. Currently there is no look-back period for the Aide and Attendance benefit, but there are rumors congress will put one in place to prevent aggressive asset protection.
County and State Programs
Municipalities have made an effort in recent years to combat the problem by offering special programs for seniors in need. Meals on Wheels, home chore and respite care providers offer support for seniors planning to age in place in the comfort of their own home. However asset and income limits do apply.