As the American population ages, Baby Boomers face the reality of paying for the long-term care costs of both their parents and themselves. Faced with this looming reality, it becomes clear that you can never plan to soon for how to pay for your future healthcare needs.
Even if you intend to live at home instead of joining a retirement community or an assisted living community, you can't ignore the possibility that an unexpected health issue could require you to join such a community. Thus, you should plan for this future just in case, as the cost of long-term care will only increase.
The median costs for long-term care in the U.S. in 2015* are:
|Type of Long-Term Care||Median National Rate|
|Elderly Day Care||$69/day|
|Home Health Aide||$20/hour|
|Nursing Home (Semiprivate)||$220/day|
|Nursing Home (Private)||$250/day|
Many Ways To Pay For Care
Long-term care refers to the different levels of care that you may require as your medical and mental needs change over time.
Long-Term Care Insurance - Long-term care (LTC) insurance is an option to help you protect yourself and your family against the high cost of paying for care. The considerations for this insurance depend on age, assets, health and future plans, so working with an agent is necessary.
Medicaid - This federal program is designed for seniors with very limited resources. Facilities that accept Medicaid are limited and individuals must qualify for the services.
Medicare - This federal program covers nursing home expenses for an individual already enrolled, but only under certain circumstances and for a limited amount of time, generally following a hospital stay.
Private Health Insurance - This private-pay option does not cover long-term care, unless your policy specifically designates that it includes LTC insurance. Do not assume the LTC is included; make sure to confirm this with your agent.
Programs of All-inclusive Care for the Elderly (PACE) - This is another federal program which integrates Medicare and Medicaid. It is only available in certain states. You need to qualify, enroll and possibly pay a monthly premium.
Veterans Benefits – These benefits may be available if you or your spouse have served in the military. Services are limited to certain facilities and may involve a co-payment.
Paying for care requires taking the time to define your own goals, assess your financial and medical needs, and determine what is most important in your future, as these are all crucial aspects of your plan for paying for care. Sharing these plans with your family or a trustworthy friend who knows you well then becomes the foundation for paying for your care. To help you get started with the process, be sure to visit our Senior Finance Center.
*From Genworth Financial's 2015 Cost of Care Survey.
Written by senior housing writer Marky Olson and Andrea Watts.