With baby boomers poised to become the largest senior population in American history, many families will have to find ways to pay for long term care services they need. Long term care could mean assisted living, group homes, memory care, nursing homes, etc. or even in-home care for those who prefer to age in place. Unfortunately, the cost of these services is high.
For many, the most frustrating aspect is not the loss of independence, but the fact they worked hard their entire lives to leave behind a financially beneficial legacy for their children. Indeed, the cost of long-term care, which typically costs between $2,000 - $5,000 per month for full time care, can quickly deplete most middle-class Americans’ life savings. Employing good strategies to maximize care and minimize expense can help alleviate the strain of this scenario.
The first thing a person needs to do is to consider what kind of support system they would have if the need for long-term care arose. Do adult children live nearby and are they able to take care of you? Assume that you will need the maximum amount of care since planning for the worst is often a good way to be prepared. Figuring out how much your children, other relatives, and friends can help you will allow you to understand a little bit more clearly what your needs will be in the future. People with very strong support systems are able to age in place longer without paid help. Additionally, in situations where there is not constant supervision, a medical alert system might be a good idea. Medical alerts allow seniors to stay at home longer because the effects of falling without quick assistance can quickly send a senior into a decline. It is important to be realistic about what your situation is and how it will affect your needs going forward.
Long-term care insurance is also a good option for those who can make the investment. Policies that are purchased before age 60 are much lower in cost, so it pays to think ahead. It is important to know that you must continue to pay the premium or lose the plan. Budgeting in the premium monthly price prior to purchasing is a good idea. Nevertheless, long-term care insurance will pay for skilled nursing care. Without long term care insurance, skilled nursing is funded on a limited basis by Medicare, with the rest of the cost coming directly out of your pocket. Sadly, many seniors choose to compromise their health and move to a lower and less costly care situation because of the cost of skilled nursing. Skilled care can cost up to $5000.00/month, varying from place to place throughout the United States.
For those who have high medical need, are already sick, or for those who are denied long term care insurance, residential care homes provide a good alternative to paying for skilled nursing or paying for a larger assisted living facility. These homes often fall into a price range that is affordable with a senior’s current monthly income rather than dipping into their savings. For those who need the highest level of care and have a terminal diagnosis, hospice services can also be used to provide supplemental medical need. Home Healthcare may be an option for those who do not qualify for hospice. Both home health and hospice are paid for by Medicare, and the care lasts for a longer duration than skilled nursing.
Also, for those who like to plan even further into the future, Medicaid Long Term Care can be a good option. Each state has specific medical and financial requirements, so click here to view your state’s rules. While it’s true that the financially guidelines are strict, they only have a five-year lookback period, which means any financial decisions, transfers, or gifts, that were made longer than five years ago will not be considered when applying to Medicaid long-term care. This means that you could ostensibly transfer your home into your descendants’ name, thus allowing the house to be passed down while still receiving state assistance. If you work with a financial planner, a Medicaid planner, or even an elder law attorney in advance, they can help you protect assets and receive long term care benefits through different financial strategies.
Protecting your legacy is easier said than done, but by planning ahead, before the necessity of a crisis, a person can save a lot of money. One thing to remember about long-term care providers is that they generally are not built to compete on price, so you may find different price points for the same services from different providers. Many doctors, medical social workers, nurses, and other healthcare professionals who make referrals don’t know the different prices of care, so this is something that you will have to research. The time spent researching, however, is well worth it as the benefits can be substantial. Don’t be afraid to say that you want to pay less--sometimes that’s all it takes.
Max Gottlieb is the content editor of Senior Planning and ALTCS. Senior Planning is a long-term care-planning agency in Phoenix, Arizona that offers free assistance to seniors and their families.
