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The High Cost Of Long-Term Care: The Shocking Truth

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It’s so easy to allow things like planning for old age to fall by the wayside. Who wants to think about growing old, let alone plan for the possibility of long-term care? But it’s important to wrap our minds around it, sooner than later. The costs associated with aging can be staggering, specifically the cost of long-term care. The average cost of a private room in a nursing home is over $100,000 annually. Will you have access to that kind of funding if the time ever comes?

What exactly does “long-term care” refer to? This involves providing assistance with what’s known as Activities of Daily Living (ADLs). Because you get dressed, prepare and eat food, and answer the call of nature on a daily basis, if you need help in any of these areas, then you require “long-term care”. If you’re wondering why health insurance doesn’t cover long-term care, the answer is relatively simple but also unfortunate. Regular health insurance would cover assistance with ADLs if you were recovering from surgery, for example. But it won’t cover the relatively normal aspects of aging. You’ll need to make other plans for this.

It may sound scary, but the truth is that you either will or will not need long-term care… there’s no in-between. Your chances as an individual are either 0% or 100%. While that figure is pretty black and white, the cost of long-term care is quite variable, based on what you’ll need. So until someone can perfect the crystal ball, the best you can do is be aware: there is the possibility of staggering long-term care costs down the road, and you’ll need to plan the best you can. 

Your planning options basically come down to three things: paying cash out of pocket, utilizing a health savings account, and purchasing a long-term care policy. A combination of these three could be a great option, and the more time you have, the more you can get done. Retirement savings accounts like IRAs and 401(k)s make great resources to tap down the road, and if your employer matches your contributions on some level, that’s free cash! Health savings accounts are a big help too. Perfect for small contributions from each paycheck that really add up over time.  

The standard advice is that you should start planning for old age in your 50s, and there are several reasons for this. One is that many people are still in relatively good health, so they’re likely to qualify for a lower monthly rate on long-term care insurance.

Inflation is another reason to start young; if it costs over $100,000 to provide annual long-term care to a patient now, imagine what that will look like 30+ years from now! Long-term care insurance does account for inflation however, so you don’t end up losing your shirt when all you really needed was a little help changing it. 

But what if you never end up needing help changing that shirt? Well, count your blessings because the majority of people do. The U.S. Department of Health and Human Services says that about 70 percent of people over age 65 will require some type of long-term care during their lifetime. More than 40 percent of people will need that care in a nursing home. 

Are you already at or past retirement age, and is all this coming at you a little fast? Well, don’t be too hard on yourself. You are in a unique position; you’re among the first people who even need to think about this sort of thing. Our life expectancy has grown quite a lot in the last 50 years, so the idea of living long enough to need help getting dressed in the morning is a relatively new phenomenon. 

But more importantly, it’s not too late to start planning and you don’t need to go it alone. Medicaid could offer you a helping hand should you ever need it, but there’s no time like the present for getting a plan nailed down. As Certified Medicaid Planners, this is exactly what we do here at Eldercare Resource Planning. We can easily guide you in the right direction, so give us a call. Let us help put your mind at ease.

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