Long-term care is a topic that most wish to avoid, if possible. Other aspects of planning one’s estate feel easier to handle, as they deal more with how one wished to be memorialized. Yet a recent survey conducted by the Associated Press highlights some concerning trends about Americans’ awareness of long-term care coverage, while another—the Genworth Cost of Care Survey of 2015—sheds some light on just how sky-high costs have risen.
Medicare and Medicaid are often debated and often misunderstood topics when it comes to planning for end of life, and both surveys illustrated just how unsure the American public is about what is covered under each. The truth is that Medicare does not pay for ongoing long-term care (although it will pay for intermittent stays at nursing facilities), and doesn’t typically pay for care in the home. Yet just over 60% of those surveyed believed it would or were unsure.
Many believe that where Medicare fails, their private insurance will be picking up the tab. However, most health insurance plans will not cover long-term services like a nursing home or ongoing care provided at home by a licensed home health care aide. Unfortunately, the surveys uncovered a lot of confusion here, as well, with about 1 in 5 people unsure of the coverage provided for long-term care services.
Medicaid is actually the largest payer of long-term care services. In fact, in 2013 it picked up 51% of the national long-term care bill totaling $310 billion. However, over 50% of those surveyed said they don’t expect to need Medicaid to help pay for ongoing living expenses as they age. This may not be a realistic expectation, with average costs for nursing homes at approximately $80,300 and $44,616 for home health care. In the Greater Boston area, that number can potentially be in excess of $150,000!
According to the surveys, most Americans seem to be unprepared for these costs, and only about a third of participants were “very or extremely confident” in their ability to pay. However, amongst those who had made plans regarding funeral arrangements or had spoken with family about care preferences, the numbers got slightly better. Yet while 65% had planned or spoken to loved ones about funeral plans, only 42% had discussed care preferences and only about 33% had money saved for long-term care.
While end-of-life planning is not the most joyous of topics, long-term care is an increasingly important conversation to have with loved ones. An experienced estate planning attorney can work with you, help you understand your coverage and assist you in planning for that eventuality.
For more information, explore our website and contact us to schedule a consultation today!
Reference: ElderCounselor (September 2015) “Why We Fail to Plan for Long-Term Care.”
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