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Don’t Rely on Medicare for your Long-Term Care

More than half of Baby Boomers (56%) believe Medicare will pay for long-term care. Are you one of them?

As the need for having a retirement plan in place becomes more urgent, don’t neglect to make sure you are taken care of in the event that you need long-term (custodial) care.

What is Long-Term Care?

If you are unsure of what that means, here’s the skinny:

Long-term care (LTC) is a range of services and support to meet health and personal care needs over an extended period of time. This is non-medical care provided by non-licensed caregivers. It largely consists of help with basic personal tasks of every day living like bathing, dressing and using the bathroom. Most nursing homes and community living centers and in-home care providers are considered part of long-term care.

Why Would You Need It?

People often need long-term care when they have an ongoing health condition or disability. Typically this is a gradual development as people age, such as with Alzheimer’s, but it can sometimes come about suddenly, such as after a heart attack. It may not be so complex, there are a myriad of physical and mental issues that may inhibit a person from being able to fully perform daily care tasks such as bathing, dressing, grooming or making meals.

Sometimes a person’s family may help provide long-term care at home. However, many times there are gaps during the workday or times when you may need extra services, when you may need to employ home-health services.

Either way, the reality is that 7 out of 10 seniors will need long-term care at some time and the costs add up.

Long Term Care Costs

Long-term care costs for the year in 2020 ranged from:

  • $93,075 to $105,850 – Nursing Home
  • $19,240 to $51,600 – Community and Assisted Living
  • $53,768 to $54,912 – In-Home

You Think Your Medicare / Medigap Plan Covers It

It doesn’t. The simple answer is that Medicare pays for care that is skilled, meaning that the care requires that of a registered nurse, physical therapist, etc. Medigap plans are intended to fill in the ‘gaps’ in Medicare insurance, however, does not cover long-term care needs for the elderly including assisted living, Alzheimers, or other adult daily care.

The confusion may be because Medicare pays for short stays at a skilled nursing facility (SNF). Here is a quick run-down of Medicare part A and what it covers:

  • Days 1 through 20: Part A pays the entire cost of any covered services.
  • Days 21 through 100: Part A pays for all covered services, but you’re now responsible for a daily coinsurance payment. For 2020, this is $176 per day.
  • After 100 days: Part A pays nothing. You’re responsible for the entire cost of SNF services.

Long-Term Care Insurance Costs

Most plans are like life insurance when it comes to pricing and vary by age, gender and the type of plan you choose. However, as an example, a single 55-year-old male purchasing a $165,000 policy benefit will pay $950 per year, while a single 55-year-old woman will pay $1,500 annually. Adding 10 years, a 65-year-old single male will pay $1,700 per year for the policy, while a single female of the same age will pay $2,700. Also, rates do not go up as you get older or if you must use it earlier than expected!

In the end, having a backup plan that will keep you from having to sell all your assets so you are cared for will help you, your family and your legacy. If you have not prepared for LTC, reach out to me. I can assist you in selecting a good LTC policy. Nobody wants to live out their last years confined to an uncomfortable environment where they feel alone. A LTC policy protects you. You also may be surprised to know that it is not just the elderly that requires LTC, 37% are under 65.

Brenda Gilliam
Extra Help Coordinator
Phone: 423-276-5807

* Not affiliated with any government agency.

*Image by Sabine van Erp from Pixabay

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