Paying for nursing home care or other long-term care is as difficult for many people to discuss as death and dying. And with the Baby Boomer generation retiring, nursing homes becoming increasingly crowded and premiums for long-term care insurance policies on the rise, it is time to have that difficult conversation with family members and loved ones. Being able to pay for an “LTC” policy without sacrificing retirement funds is a real challenge, especially now that LTC premiums are on the rise.
When people purchased their policies 10 to 15 years ago, nursing home costs were about $150 or $200 a day; now typical costs are between $400 and $500 a day, or $12,000 to $15,000 per month.
The expense incurred by the insured going on claim has caused the long-term care insurance industry to downsize. Those companies still offering policies are bumping up the premiums amid the rising cost of long-term care.
What the middle class doesn't know is that there is no plan for them. They can get their Social Security and use Medicare. They may believe that they're covered for old age, but it won't be enough. A long-term care policy must also be kept and not allowed to lapse.
The high cost of long-term care can result in many people relying on family members who then struggle to handle their jobs and care for their parents at the same time. In the event that issues develop that put a person beyond home care (like dementia), the patient will end up facing astronomical healthcare costs. In many cases, the only other option is Medicaid, which covers the cost of care when an individual becomes financially eligible which varies somewhat from state to state with certain federal requirements. An elder law attorney can help you determine whether you are eligible.
Whether you need a long-term care policy and can afford it depends on a family's health history. But like anything else, it's insurance—it's a hedge: you may not ever use it. When you look at the numbers, even with increased policy premiums, you're still going to be better off at the end of the day by having it.
There are only a few certainties in life. In addition to death and taxes, another certainty is that most people will at some point in their lives need long-term care. The best way to deal with it is to speak with your family and meet with an elder law attorney before you are at a crisis point.
Creating an estate plan before a crisis can give you and your family comfort, knowing you have a plan in place. For more information, explore our website and contact us to schedule your consultation today!
Reference: Buffalo Business First (November 23, 2015) "Finding ways to afford long-term care"