Paying For Long-Term Care in Later Life
It’s Nursing Home Week (May 10 – 16, 2015) and in line with this event, I want to share with you how much nursing home care costs and how to prepare for long-term care. It’s natural to want to live independently in your own home for as long as possible, but as you grow older, there may come a time when you’ll need to consider living in a nursing home. Even if you don’t need long-term care right now, it’s important to consider the costs and organize your finances accordingly.
Living in a nursing home can be costly
The cost of nursing home care is expensive, especially if you have complex needs. The exact cost will depend on a range of factors, but as a guide in general, the average cost of a private room in a nursing home in 2012 was $248 per day, according to a MetLife survey. In the past three years the costs have grown even higher. When you consider that the average nursing home stay is 835 days, the costs can really add up!
You may assume that Medicare will cover your long-term care costs, but it won’t provide you with coverage if you need to go into a nursing home indefinitely because you’re disabled or unable to care for yourself. Fortunately, you do have other options for covering your long-term care costs.
Covering your long-term care costs
One option is to use your personal savings or a loan, such as a reverse mortgage, to pay for your care. However, this will have an impact on the inheritance you leave to your loved ones, and you may quickly run out of money.
If your money does run out, the only way you will be able to continue to receive care is to go on Medicaid. The benefits are low, and you’ll be forced to choose among low-cost, low-care facilities where your quality of life is not assured.
Long-term care insurance can reduce your expenses
Another option is to buy long-term care insurance, which can help you limit the effects of your care costs on your future finances. Long-term care insurance provides you with a daily benefit amount for the services you need – for example, $100 a day for nursing home care.
Through long-term care insurance, you can assign a set amount of money to pay for the long-term care costs you might accumulate in the future, so that you can be sure that you will not run out of money to pay for the long-term care services you might need.
Advance planning is important
You may think that you don’t need to consider your ability to pay for care until you actually need it. However, planning ahead is important in case you ever suffer a crisis – such as a stroke or a bad fall – that prevents you from being able to make decisions about your finances.
If you have a home, savings or other assets, you should take out long-term care insurance now so you don’t risk losing everything to pay for your care. It’s never fun to think about buying something like long-term care insurance which you hope you’ll never need to use. But if you find yourself in need long-term nursing care in the future, you and your loved ones will both be relieved that you are properly prepared.