Medicare and Long Term Care

With 10,000 Americans turning 65 years old every day, it’s not hard to see why the nation is facing growing health care costs. As the senior population grows larger than it’s ever been, planning for those health care costs has become a vital part of creating a successful retirement plan. Sadly, many Americans are confused about who covers long term care and think they are off the financial hook.

Americans Confused about Who Pays

A recent AP survey looked at Americans’ attitudes and plans for long term care. As it turns out, many are confused about the role that Medicare plays and wrongly believe they can rely on the government program for long term care. 42 percent of Americans over the age of 40 think Medicare pays for long term care in a nursing home and 38 percent think Medicare pays for long term care received at home by a home health agency. These numbers are discouraging because they highlight the lack of awareness surrounding long term care in the country.

Close to half of Americans are not planning for the cost of nursing home care because they think the government will pay for it. The truth is, Medicare will only cover the cost of long term care in a nursing home facility if you meet a specific requirement. You must be admitted to the hospital as an inpatient and have your inpatient stay last at least 3 days. Even then, if you meet the inpatient requirement, the program will only foot the bill for a very short period of time, a maximum of 30 days in most situations.

Looking for Help

If you can’t rely on Medicare, what can you rely on? Medicaid is the primary payer of long term care in the United States, but in order to qualify for benefits, you must spend your assets down. Your cash assets must be spent down to $2,000 to be eligible for Medicaid and most people don’t want to deplete their hard earned assets to pay for care they desperately need. That’s why family caregiving is emerging as such a huge part of the long term care equation.

People aren’t ready to foot the bill on their own, so rather than exhaust their nest egg on care, they rely on family members or friends to provide their long term care. Asking your loved ones to assist you with basic daily tasks like bathing, dressing, and toileting isn’t exactly in the majority of Americans’ retirement plans, though. Adult children are also spread across the country in this day and age, meaning it is much more difficult in the modern day to depend on family members for care without expecting them to make huge sacrifices.

Making Your Own Plans

It’s not uncommon for people to wait to plan for long term care until the need for care arises, but doing so will leave you with few options, none of them ideal. Rather than be slapped with sticker shock of the cost of long term care or burden your family with your daily care, you can plan ahead for the cost by purchasing Long Term Care Insurance.

Long Term Care Insurance is designed to protect your assets by covering the cost of your long term care if you meet certain requirements. The requirements usually involve you being unable to perform activities of daily living on your own. Once you have met the requirements, you can make a claim and the Long Term Care Insurance carrier will help pay for at least the bulk of the cost of long term care. Depending on the daily benefit amount you choose, your policy may or may not cover the full cost of care.

The bottom line is, unless you are ready to spend down all your retirement savings, you can’t rely on Medicare or Medicaid to pay for your long term care. You need to plan for it yourself. Learn more about your risk of long term care or find out if Long Term Care Insurance is right for you.

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