No one looks forward to living in a nursing home. And few build that possibility into their financial planning, an understandable lapse but unwise in the long run.
Medicare isn’t an option for truly long-term care. Coverage of skilled nursing care is limited to 100-day benefit periods and requires at least three days of hospitalization before being admitted to a home. Moreover, “covered” doesn’t mean free. While Medicare pays all expenses for the first 20 days, the next 80 cost a resident $133.50 a day—that is, if coverage for the full 100 days is approved; consumer advocates say approval for much shorter stays is more likely. Medicare will cover an unlimited number of days of part-time home healthcare for homebound seniors, although again, getting approval can be difficult. Medicare does not cover assisted living facilities.
Private Payment
You might consider using your savings to cover the cost of your long term care needs. Unfortunately, even the most well laid out plan is subject to unexpected challenges. In 2008, the national average cost of a semi-private room in a nursing home was $69,715 annually.1 With an average stay of 2.4 years,2 that’s more than $167,000 per average stay. How long might it take to save for the cost of an average nursing home stay today?
Also, there is no way to be sure that you won’t need long term care before you have saved the appropriate amount to cover the increasing cost of care. Since life is full of surprises, unexpected events can eat away at your savings or the money which you may have counted on for long term care expenses.
Long Term Care Insurance
Long term care insurance is a reliable method of paying for long term care expenses. Long-term care insurance pays for care generally not covered by regular health insurance. Long-term care insurance can help you protect assets and retain more control over your health care decisions later on in life.
The concept of Long-Term Care insurance is not that different from other types of insurance. It helps give you peace of mind knowing you’ll have money to help pay the bills if something happens. After all, you have homeowners insurance to protect you in the event of a fire or storm, automobile insurance to protect you if you’re involved in an accident and life insurance to protect your family if you die too soon.
Many people have the perception that Long-Term Care insurance is more expensive than it really is, and they’re surprised to find it’s a reasonably priced way to help protect their life savings.
Medicare
Medicare isn’t an option for truly long-term care. Coverage of skilled nursing care is limited to 100-day benefit periods and requires at least three days of hospitalization before being admitted to a home. Moreover, “covered” doesn’t mean free. While Medicare pays all expenses for the first 20 days, the next 80 cost a resident $133.50 a day—that is, if coverage for the full 100 days is approved; consumer advocates say approval for much shorter stays is more likely. Medicare will cover an unlimited number of days of part-time home healthcare for homebound seniors, although again, getting approval can be difficult. Medicare does not cover assisted living facilities.
1“The MetLife Market Survey of Nursing Home and Assisted Living Costs,” The MetLife Mature Market Institute, October 2008.
2http://www.cdc.gov/nchs/fastats/nursingh.htm
