According to the U.S. Department of Health and Human Services, 70% of those turning 65 will need long-term care at some point. However, funding long-term care can be incredibly expensive and complex. In recent years, strategies have changed and there are now many more options than the traditional LTC programs. So, the more information you have, the better you’ll be able to make decisions regarding your long-term care. Keep in mind, though, that there are also many misconceptions regarding this type of care. The following are a few of the most common myths about long-term care that you need to be aware of.
If you’re looking for assistance in creating a personalized financial plan, speak with a CERTIFIED FINANCIAL PLANNER™ professional at Good Life Financial Advisors of NOVA today!
I Have Enough Saved to Cover Long-Term Care Expenses
In addition to being more common than many people realize, long-term care is also often far more expensive than you might think. Even a strong retirement savings account may not be enough to cover all the costs of long-term care.
The biggest misconception regarding long-term care costs is that if you stay in your home, you won’t need to spend much. Staying in your home may be cheaper than a nursing home or assisted living home, but it’s still rarely cheap. The average cost of a home health aide is $50,000 per year. Even while living in your own home, if you have a long-term health issue, you could easily spend hundreds of thousands of dollars in only a few years.
Long-Term Care is Only for People Over 65
The majority of long-term care participants are over 65. However, there are also plenty of conditions that may require a person to need long-term care prior to 65, such as an accident or a chronic illness. If you’re planning to purchase long-term care insurance, as with any other insurance, you’ll want to have it before you need it. This is why the ideal time for most people to purchase long-term care insurance is in their late fifties or early sixties.
Medicare or Health Insurance Will Pay for Long-Term Care
There are only a few specific instances where Medicare will cover long-term care expenses. Medicare typically only covers 100 days of skilled care. This skilled care only covers services provided by certified doctors and nurses. This means that Medicare covers none of the other services you may need assistance with, such as custodial care or care that helps you with the activities of daily living (ADL).
Many health insurance plans don’t cover long-term care expenses either. Most in-home services that health insurance may cover are for short-term issues, with a focus on rehabilitation and recovery. In contrast, long-term plans are usually focused on custodial needs.
I Won’t Be Eligible for Medicaid
Medicaid often covers many long-term care expenses, but it can be difficult to qualify for. In many states, you can only have $2,000 in assets to be eligible. However, the rules vary by state, and some may even have certain exemptions such as not allowing your house to count towards the $2,000. Other potential exemptions include one vehicle, personal property, household furnishings, and assets that can’t be converted to cash. There is also something called the Community Spouse Resource Allowance, which allows the spouse who is not applying for Medicaid to keep more assets.
Make Assumptions About Your Family’s Plans
You may assume that your children or other family members will care for you in your home, but this may require far more of them than you currently realize. In-home care can be incredibly time-consuming. Your family members may also have other obligations that do not provide them with the flexibility to give you the care you need.
Long-Term Care Insurance Covers All Long-Term Care Expenses
Long-term care insurance can go a long way to helping you cover your long-term care expenses, but not all plans are the same. Many plans help cover long-term care expenses, but do not cover all expenses. There may be a daily limit the insurance covers, a service your policy doesn’t cover, or limits to the total benefit your plan covers. Prior to purchasing long-term care insurance, it’s important to understand everything your policy does and does not cover.
The Planning is All on You
Now that we’ve cleared up some of the common myths about long-term care, it’s time to make a plan. We understand that creating a plan that helps you prepare should you need long-term care can feel daunting. Consider easing the burden by working with a CERTIFIED FINANCIAL PLANNER™ professional at Good Life Financial Advisors of NOVA. Our team is here to create a plan that works for your specific needs.