Three Questions About Long-Term CareSubmitted by FSB Premier Wealth Management on November 7th, 2014
November is Long-Term Care Awareness Month so I have put together a list of three common questions I get asked regarding the subject.
What is long-term care?
Long-term care refers to the ongoing services and support needed by people who have chronic health conditions or disabilities. Generally, long-term care falls into one of three categories depending on the need for assistance:
- Custodial Care – personal care often provided by family caregivers or home health workers who provide help with the activities of daily living (bathing, eating, dressing, etc.)
- Intermediate Care – care provided by professional health care providers at assisted living facilities and adult day cares
- Skilled Care – generally round-the-clock care that’s given by professional health care providers, which commonly occurs in nursing homes, but may also happen at home
Why do I need to consider planning for long-term care?
According to www.longtermcare.gov, about 70% of people over age 65 will need some type of long-term care during their lifetime. As medical technology advances and life expectancy increases, that number will almost surely rise. Also, younger people may need long-term care too as a result of a disabling accident or illness.
How can I pay for it?
When you consider that the average yearly cost for long-term care is about $75,000 for a semi-private room in a nursing home and about $40,000 for care in an assisted-living facility, you can see that the need to plan for this care should be a priority for many people. Here are some ways you may pay for long-term care:
- You can pay for it out of pocket on an as-needed basis. Given the numbers I shared above, you will need to have substantial assets saved to accomplish this, especially if your need lasts for several years.
- Contrary to what many people believe, Medicare only provides limited coverage for long-term care services, such as skilled nursing and physical therapy.
- If you are planning on Medicaid paying for your long-term care, you should know that you will have to spend your assets down to around $2,000 in Iowa before you can qualify for it.
- Perhaps one of the best ways to pay for long-term care, or at least part of the cost, may be by purchasing a long-term care insurance policy. These policies may offer you some flexibility if you have a long-term care need and may also help you shield some of your assets from the Medicaid spend down I mentioned above.
Please contact me to discuss how long-term care planning fits into your overall financial plan!
Jordan Alborn, CFP® - VP/Financial Advisor
FSB Premier Wealth Management, Inc.
This material is provided for general information and educational purposes based upon publicly available information from sources believed to be reliable. Any opinions expressed are my own, which are derived from my experience and background as a financial advisor. They do not represent those of my employer, FSB Premier Wealth Management, Inc., or any of its affiliates including Farmers State Bank.