In the past, most people worked throughout their lives to save a little bit of money for a comfortable, but not luxurious, retirement. After retirement, they would travel for a while if they were lucky before they got sick and passed away. Most people did not live long after retirement.
Today, the average life span is into the mid-eighties. That means that most of us need to be prepared to financially support our lifestyles for at least another twenty years after we retire.
In addition, modern medicine has made it possible for us to live many years with illnesses that would have quickly taken our lives in the past. As a result, we need to be financially prepared to pay for our lifestyle with the rapidly increasing cost of medical treatments for our illnesses. The challenge for all of us is to find the medical care that we require as we age and determine a way to pay for that care while at the same time, maintaining as much of our independence and dignity as possible.
Also in the past, families lived in close proximity to each other with many women working in the home. Today, families are spread across the country or multiple countries and more than half of all women work outside of the home. This makes it more difficult for a family member to provide us care as we age. Providing care from a distance or while trying to hold down another full-time job is wrought with stress amongst the family and typically results in care that is not adequate.
None of us wants to be a burden to our families. None of us wants to have to go to a nursing home. However, if we do not plan ahead, we limit our options when the curve ball comes our way.
There are four options available when you need long-term care. First, you can self-pay with your own money. Most of us do not have enough money to do that for long. Second, if you have invested in a long-term care insurance policy, you can make a claim to your insurance carrier for your long-term care expenses. Third, government benefits called Medicaid (not Medicare) are available to people that require long-term care and meet the income and asset limitations. Fourth, there is a Veteran pension called Aid and Attendance that many Veterans have earned based on their service to the country.
Long-term care insurance is an insurance policy that you purchase to help you pay for the high cost of care in the future. The policy provides coverage if you need assistance with two basic self-care tasks like toileting, feeding, grooming, bathing, walking, etc. While you may believe that it is unlikely that you would ever need that type of assistance, the odds are very high that you will require help with these basic tasks. The U.S. Department of Health and Human Services expects 70% of people turning 65 years old now will require long-term care during their lives.
Many long-term care insurance policies cover the cost of care in your home, assisted living care, or nursing home care. While this level of care varies greatly depending on the quality and level of care that you require, you can expect to pay thousands of dollars a month. In Georgia in 2010, in home care cost $38,897 per year for 44 hours per week of care, an assisted living facility cost $30,000 per year, and a nursing home cost $63,875 per year. (CareScout 2010 Cost of Care Survey)
At these rates, you can see where it would be beneficial to have long-term care insurance to pay for your care.
Medicare covers up to 100 days of skilled nursing care rehabilitation per illness if you have been hospitalized for 3 or more days as an inpatient, require a high level of care, and continue to improve. The first 20 days are covered 100%; the next 80 days require a $157.50 per day co-pay. Additionally, once you stop improving, Medicare stops paying. After the initial 100 days, you are responsible for the entire cost of your care.
Medicare will pay for home health care if you are housebound and your physician has ordered home health for you. Medicare will pay up to 35 hours per week and you only have to pay 20% of the cost of the medical supplies and equipment.
Medicaid is a federal program that will pay for nursing home care. While Medicaid and Medicare sound similar, they are two completely different government programs. Medicare is a program that you contribute to during your working years. Medicaid is a program that will pay for medical expenses when you cannot afford the cost.
Medicaid planning is legal. Nelson Elder Care Law works to protect your assets within the bounds of the law. Congress allows you to qualify for Medicaid after meeting certain requirements, and Congress can change those requirements if they felt they were being abused. Many of us use a certified tax planner to complete our taxes because they are very familiar with the laws and changes to the laws that can be used to reduce our tax payments.
Nelson Elder Care Law works with the laws governing Medicaid eligibility on a daily basis; we know the ways to legally protect your assets.