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Options when paying for long-term care

2016-1229-senior2-wAging has its side effects, as it’s inevitable that individuals’ bodies and minds will change as they approach their golden years. Illnesses, disabilities and other conditions may speed up the changes in certain individuals.

While many seniors continue to live independently well into their golden years, some require long-term care. The decision to move an elderly relative into a long-term care facility can be difficult. In addition to the emotional effects of such a decision, families must deal with the financial repercussions.

Long-term care services can be costly, and many general healthcare insurance plans do not cover long-term care. The U.S. Department of Health and Human Services offers that an assisted living facility may cost roughly $3,300 per month for a one-bedroom unit, while a nursing home may cost between $6,200 and $6,900. Seniors or families who have enough income and savings may be able to pay for long-term care services without assistance. But those who cannot afford to do so may need to use different programs or resources to pay for long-term care.

Long-term care insurance: According to WebMD, commercial insurers offer private policies referred to as long-term care insurance. These policies may cover services such as care at home, adult day care, assisted living facilities, and nursing homes. However, plans vary widely. In addition, the cost for care and eligibility requirements may change as a person ages, so it’s best to purchase this insurance while young and relatively healthy.

Government assistance: Government health programs may pay for a portion of certain care but not all of the services offered by long-term care facilities. For example, the Canadian Life and Health Insurance Association says government health care programs may cover only a small percentage of the costs for nursing homes or other specialized residential care facilities, or perhaps none at all depending on the circumstances. In the United States, Medicare is the federal health insurance program for people age 65 and older and for some people younger than 65 who are disabled. Medicare generally does not pay for long-term help with daily activities. Medicare pays for very limited skilled nursing home care after a hospital stay, but not for many assisted living facilities.

Medicaid is another option that pays for health services and long-term care for low-income people of any age. First, applicants must determine their eligibility for Medicaid. Medicaid is typically only available after most personal assets have been depleted. Even with Medicaid, a resident of a long-term care facility may need to pay a portion of the care out of pocket. What’s more, as part of the application for Medicaid, a “look back” at assets is required to deter gifting assets in order to qualify.

Paying for long-term care requires planning well in advance of when such services may be needed.

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