Long Term Care Options

Many baby boomers are facing the decision of whether or not to buy long term care insurance. Unfortunately, most choose not to purchase coverage leaving their assets at risk of being wiped out if long term care should be necessary. While the odds of requiring long term care services are significant – more than 70% of Americans over the age of 65 will need long term care services at some point in their lives – most seniors are under the mistaken impression that they will never need it.

A. The Danger of Denial. At nearly $9,000.00 per month for nursing home care, about $4,000.00 to $5,000.00 per month for an assisted living or $25.00 per hour for in-home care, few seniors can afford long term care services for very long. With Medicaid generally providing coverage only for nursing home care after a person’s assets are spent down, it is a risky strategy for seniors to live in denial that long term care services will not be needed.

B. Problems With Long Term Care Insurance. Most people don’t consider buying long term care insurance until they are well into their sixties or seventies. By then, it is often too expensive or they can’t qualify due to health reasons. Furthermore, for traditional long term care insurance, a common complaint is that if long term care is never needed, the premiums that were paid are lost.

C. Options to consider. Life insurance or annuity contracts with long term care benefits can be an attractive alternative to traditional long term care insurance. These so called hybrid policies provide long term care coverage – including not only nursing home coverage, but also in-home or assisted living care - if such coverage should be necessary. If long term care is not needed (or it is needed only for a short period of time), the policies are paid to the beneficiaries following the death of the owner.

D. Poor Planning. Most people are unaware of these options or simply choose to live in denial. Unfortunately, the most common strategy is to do nothing and when a crisis happens, rapidly spend down assets in an attempt to qualify for Medicaid or possibly Veterans benefits. What a risky and often unnecessary strategy. After all, who wants to deplete their assets to qualify for Medicaid and spend the last months or years of their life in a nursing home? To protect against the risk of needing long term care services, be sure to consult with an experienced elder law attorney.