Long-term care can be an expensive proposition that too few people are prepared for or understand. Unfortunately, most people don’t think about how they will pay for care until they are confronted by a serious health situation for themselves or a loved one.
The worst time to start planning for Long Term Care is in the midst of a crisis because the options to pay for care can be complicated and take some time to access.
Also, the costs of long-term care are expensive and rising every year.
- Full time Home Care can run $5,000-$10,000 every month.
- Residing in an Assisted Living community can cost $3,500-$5,000 every month.
- Memory Care can run $5,000-$8,000 every month
- Nursing Home care costs around $7,000-$10,000 every month.
The three primary ways to pay for care are with Medicare, Medicaid, or Private Pay through insurance, savings or assets.
- Medicare is an “age based” program for people age 65 and over. It does not cover long-term care, but it will cover the first 100 days of rehabilitation care in a licensed skilled nursing facility upon direct discharge from a hospital.
- Medicaid is a “means based” program, which means to qualify an applicant must meet both standards of medical necessity and be below set asset and income levels, which in essence requires that the individual is below the poverty line. Applying for Medicaid can be a challenging process that requires the applicant to submit detailed medical and financial records. Medicaid will “look back” five years at financial records to make sure that assets have not been hidden or transferred to family members below their true market value. Medicaid primarily covers “qualified” skilled nursing services (mostly nursing home care).
- Private Pay primarily comes from an individual and/or a family’s savings, assets, and income. It can also come from insurance in the form of long-term care insurance or the conversion of a life insurance policy into a Long Term Care Benefit Plan. People that are private pay can choose any form and location of care that they want.
Independent and Assisted Living, as well as most forms of Home Care are private pay only. Nursing homes are primarily covered by Medicaid for people who can qualify. Skilled Rehabilitation and Hospice are primarily covered by Medicare.
It is becoming more competitive to get access to the best long-term care providers as 10,000 Baby Boomers have started turning 65 every day. Statistics show that 70% or more of people over the age of 65 will require long-term care services.
Today there are 10,000,000 people receiving long-term care in the United States. People with the ability to afford private pay care are typically given preferential access to the best care providers and locations; while those on Medicare and Medicaid are given little choice as to where they can go and will share a room with another person.
Click here for a short video about creating a “family plan” to be ready for Long-Term Care
Chris Orestis, executive vice president of GWG Life, has more than 20 years of experience in the insurance and long-term care industries and is nationally recognized as a healthcare expert and senior care advocate.
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