Financing Long Term Care: How will you pay for it, and what challenges will you face?

No one is surprised to learn that the cost of all services, especially long term care costs, continue to rise. The problem that faces most families today is that their retirement plans have suffered due to the U.S. economy.  The money carefully set aside for potentially financing long term care expenses may be insufficient to provide the level of care we want and deserve.

Most families ‘self-insure’ when they provide in-home care for aging relatives.  Even if outside help is hired, the costs are usually affordable and either paid for by the individual or shared by several members of the family.

The unknown or secret cost of in-home care is the toll it eventually places on the caregivers.  Once the commitment is made to the loved one requiring care, it is difficult to change the status quo.  And, if the potential expense of assisted living or nursing home care has not been set aside in advance, there may be limited options for alternative care.

If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham FarmsTroyFarmington HillsRochester HillsSouthfieldWest Bloomfield TownshipBloomfield Township, and the surrounding Michigan areas.

Schedule your Free Consultation today: (248) 398-4665.

The Medicare program does not pay for long-term care.

There is some short-term coverage for nursing home stays and follow up home care that follows hospitalization but a permanent move to a skilled facility will not be covered.

Some individuals have Medicare supplemental insurance which may help with some deductible or coinsurance payments but it is also not designed for financing long term care or permanent stays in skilled facilities.

The only government program that provides for the cost of long term care coverage is Medicaid -- the federal program crated to provide health care coverage for lower-income or impoverished Americans.  Medicaid rules are enforced at the state level.  Individuals may apply for Medicaid benefits if they meet federal poverty guidelines before entering a nursing home or after they exhaust their savings while living in a nursing home.

The rules have changed somewhat over the years so that a healthy spouse does not have to become impoverished before the spouse confined to the nursing home can be covered. The at-home spouse can now retain specified levels of assets and income. And, in some states, Medicaid benefits must be reimbursed after death if the home was not sold during the coverage period.

Medicaid rules are stringent and coverage is not guaranteed.  It is advisable not to plan on receiving any help from the Medicaid program if there are savings the family wishes to preserve for heirs.

No one can predict who will need long-term coverage

Nor can we predict how long it might be required or how much it will cost.  Regretfully, statistics indicate that health care costs are increasing at a rate greater than that of ordinary inflation.  If the cost of financing long term care only grows by 3% a year, a nursing home stay costing $50,000 today would cost more than $67,195.82 in ten years. It is a good idea to consider purchasing Long Term Care Insurance to help cover the costs associated with an extended period of cognitive or physical challenges in a persons life.

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