Estimates are that 70 percent of Americans will require some kind of long-term care, including help with activities of daily living such as walking, bathing, dressing, eating, and toileting. It’s important to be fully apprised of your care options and plan ahead so that you’re prepared to meet the financial challenges that result from a loss of independence. Assess your lifestyle, health history, family background, and personal habits to get a feel for how likely it is you’ll require long-term care. An objective and honest determination may help you avoid injury or health problems that could put you at risk for a very costly situation. There are many coverage gaps in Medicare, so be careful to assess your insurance situation and weigh the payment options that are available to you.
Learn your care options by researching assisted living, home health care, independent living, adult day care, hospice services, and skilled and rehab centers. Understanding your options will help you determine the level of care you or a loved one will need and how to cover consequent out-of-pocket expenses. In other words, if you or your partner gets Alzheimer’s disease, you’ll need to understand what level of care is indicated based on the severity of the condition. Utilize online resources such as the National Center for Assisted Living and Area Agency on Aging, to thoroughly research and know your care options locally.
Also, determine the likelihood that home modifications will be needed, particularly if you or someone in your family is in a wheelchair. There may be options to help you pay for costly physical changes designed to improve access and in-home mobility.
Long-term care can be a very costly proposition for many people. If you’re nearing retirement, it’s probably time to get serious about laying the financial groundwork and figure out how you’d pay out-of-pocket costs for long-term care. Older adults often have to dig deep to find ways to finance care, considering the limits of Medicare insurance and the prohibitive costs of life insurance policies, which people often purchase in their late 50s, which can be very expensive. Medicare isn’t a viable option for long-term care. It covers skilled nursing care expenses for up to 100 days and requires a minimum of three days in the hospital before you can be admitted to a care facility. For someone who’s had surgery or an acute form of illness and requires rehabilitation, it can work, but it’s not an option for someone with Alzheimer’s, for example. Here are some other options to help cover the cost of medical expenses.
For most people, their home is their most important asset. It may become necessary to use that asset to generate enough money for long-term care expenses. Take careful note of average home sales in your area to determine if this is a viable option for you. For example, homes in Lower Burrell, Pennsylvania, have sold for an average of $119,000 over the past month.
For people with substantial financial resources, paying for care expenses out-of-pocket is an excellent alternative to purchasing costly life insurance. You can use investments, Social Security distributions, a pension or some other reliable source of revenue.
Long-term care insurance will cover a certain daily amount of nursing home care for a given period of time. Also, it covers some care costs at home or an assisted living facility. However, it’s important to note that this form of insurance should be purchased in one’s 50s to avoid being burdened with excessively large premiums.
A reverse mortgage is a way of using the equity in your without the risk of losing it, which can happen with a home equity loan. The homeowner draws on the equity while payment is deferred until they die or leave. Qualified individuals can also sell a life insurance policy or take an advance on their death benefit to help cover long-term care expenses.
Because Medicare is of relatively little help with long-term care, it’s essential that you research and understand other options for covering care expenses. If you lack resources, you may need to get creative and draw on personal assets (anything from investments to revenue form a reverse mortgage or life insurance sale) to finance what can be a very expensive situation. Do your homework well in advance so you’re prepared to act if the need arises.
Author:
June is the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is author of the upcoming book, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers.
