Long Term Care (LTC)
Long term care refers to medical and other personal services to provide ongoing care for people who have lost their ability to function independently. That may be due to physical impairments that prevent them from certain basic daily activities, otherwise known as activities of daily living.
The possibility of a prolonged stay in a nursing home weighs heavily on the minds of many older Americans and their families. That’s hardly surprising, especially considering the high cost of long term care. It’s estimated that 50% of Americans over the age of 65 will, at some point in their lifetime, need some type of long term care. As life expectancy continues to increase, this trend is likely to continue – and possibly increase in future years.
There are basically three ways to pay for long term care expenses:
- Pay out of pocket from personal income sources, assets and investme
- When still healthy enough, purchase a long term care insurance policy
- Qualify for government benefits, such as Medicaid
At TWP, we will guide you through the process. We’ll complete a well structured LTC needs analysis, and recommend a strategy asa part of your overall, comprehensive financial plan.
What is Long Term Care Insurance?
A long term care insurance policy can cover the cost of care in a nursing home, an assisted-living facility, or even care in your own home. A long term care policy pays a specific dollar amount per day for a selected period of time. LTC insurance can be expensive and the premium depends on age, health and a number of other factors.
Medicare and Medicaid Myths
Unfortunately, many people assume that Medicare will pay for long term care costs. Medicare provides only a limited coverage for a short term recovery from an illness or injury – otherwise known as skilled care or rehabilitative care. Medicare does not cover indefinite, long-term care expenses for those in nursing homes, assisted living, or adult daycare because they can no longer take care of themselves.
To qualify for Medicaid, both your income and the value of your assets must fall below certain levels, which vary from state to state. Typically, you must spend down almost all financial resources, excluding a home, personal belongings, and necessary automobiles. Additionally, Medicaid eligibility rules are numerous and complicated. They involve a strict evaluation of how an applicant’s assets were used, up to a period of 5 years prior to applying for Medicaid.
