What You Need to Know about Long-Term Care
The median cost of a private room in a nursing home was $105,850, and in-home care costs were $53,768 to $54,912 annually, according to Genworth’s 2020 Cost of Care Survey. CNBC’s recent article entitled “Most retirees will need long-term care. These are the best ways to pay for it” says these costs vary by location.
Although it’s hard to predict a retiree’s needs, the chances of requiring some type of long-term care services are high, about 70% for the average 65-year-old. Men typically need 2.2 years of care, and women may require 3.7 years.
Long-term care insurance may cover all or a portion of services. The premiums depend on someone’s age, gender, health, location and more. However, there’s a 50% chance someone won’t ever need their policy, the American Association for Long-Term Care Insurance estimates, and premium hikes can be costly. Premiums typically increase about 5%, every five years.
Somethign else to know about long term care: A hybrid long-term care policy is another option. These policies are part life insurance or an annuity and part long-term care coverage.
Seniors can buy a policy with an upfront payment, eliminating the risk of future premium increases and their heirs may receive a death benefit if they don’t need long-term care. However, it may be harder to compare prices for a hybrid long-term policy than standalone long-term care coverage.
Low-income retirees with assets below certain thresholds may be eligible for long-term care services through Medicaid.
You probably don’t know this about long term care: If you don’t have long-term care insurace, part of what the Vicknair Law Firm does for its clients is to get clients quailified for Medicaid. The best (and the least costly) approach is to engage in advanced planning long before you need it.
President Joe Biden also called for $400 billion in Medicaid funding for home and community-based care as part of the American Jobs Plan, and separately, House and Senate Democrats introduced bills supporting Biden’s agenda in June.
To learn more read: Is Assisted Living or Memory Care a Better Choice? and Will Democrats Pass Medicare Expansion?
Reference: CNBC (Aug. 26, 2021) “Most retirees will need long-term care. These are the best ways to pay for it”