What Options Do I Have To Pay For Long Term Care Expenses?
Once you need care, where will the money come from to pay for it? There are four options available to pay for long-term care:
My Family Will Pay For My Long Term Care
You can rely on family to provide the help needed for long term care expenses. In the case of the family, care may be provided by your spouse or by your adult children. A majority of the clients we work with at Imagine Insurance Advisors are quick to tell us that leaning on family members is not an option. They want their children to live their own lives and not have to care for them. Our clients want to remain independent.
If you are evaluating whether your family is an option or not, some considerations are:
- Which family member will provide care?
- Are they employed full time?
- Do they have a family of their own to care for?
- How old are their children?
- Does the selected caregiver live near you?
- Will they have the skills or physical strength needed to provide your care?
- Be honest, do you want them spending time with you because they have to or because they want to?
I Will Pay For Long Term Care From My Savings
Unless you have long-term care insurance, you are self-insuring the risk and will pay for your long term care expenses with your own assets and earned income. This may be an option for some, but something to keep in mind is the rising cost of care. Consider the following:
- How many years from now do you think it might be before you need care?
- What will the cost of long term care be at that time?
- Will your assets be able to provide care for you and your spouse both?
- What will you live on when you retire?
- Do you want to leave something to your children, grandchildren or a charity?
- Is that how you want to spend your hard-earned money?... On long term care?
- Are you sure you won't outlive your money?
Imagine Insurance Advisors can help you objectively work through these questions and more, to help you determine if long term care self-insuring is your best option. We find that some clients have decided to self insure, but we are comfortable with that only if they have carefully thought through the consequences and considerations of that choice.
The Government Will Pay For My Long Term Care Expenses
The programs available through the government are the most misunderstood and confusing option. Government programs don't provide as much coverage as most people think they do.
Medicare - Most people are under the impression that Medicare will pay for their long-term care expenses when in reality Medicare is primarily health insurance. Learn more about Medicare's coverage of long term care.
Medicaid - This program is designed for people who cannot otherwise pay for their care. Eligibility rules are complicated and limited to those with limited income and assets. Learn more about Medicaid's coverage of long term care.
My Veteran's Administration (VA) Benefits Will Pay For My Long Term Care Expenses
Veteran's health care benefits include medically necessary hospital and nursing home care and some outpatient care. The Veteran's Administration (VA) prioritizes veterans that qualify for care according to several categories.
Any Veteran who has a service connected disability rated at 70% or more, qualifies for nursing home care. Care will be provided in a VA nursing home or a VA contracted nursing home. The VA may provide nursing home care for other veterans if space and resources are available.
Veterans who have a service-connected disability are given first priority for nursing home care. Non-service connected disabled veterans requiring nursing home care must complete an income and asset assessment to determine whether they will be billed for nursing home care. The VA will pay for care only in contracted nursing homes. It will not pay for a private nursing home.
Long Term Care Insurance Will Pay For My Long Term Care Expenses
Much like you do on the risk on your auto, home and health, you can transfer a predetermined amount of risk for long-term care to an insurance company. Learn about what goes into a policy and how it works.
Long term care insurance may not be the right option for you. It's not right for everyone. You should not consider buying long term care insurance if:
- You are currently eligible or would shortly be eligible for Medicaid benefits
- You do not have significant assets to protect and it would affect your lifestyle to pay premiums from your income.
You should consider buying long term care insurance if:
- You are concerned about protecting your assets and income.
- Premiums will not affect your lifestyle.
- You want to maintain your independence and choices of where you receive your care.
- You do not want to rely on family or friends for care.