While we don't want to ever think about ourselves or a loved one needing long-term care, it is a reality that, if not faced now, could cause emotional and financial devastation in the future. Consider this when developing your long-term care plan.
Myths and Facts:
Myth: It will never happen to me.
Fact: You have a 70% chance of needing long-term care if you are over the age of 65. You have a one in two chance if you are older than 80.1
Myth: I won't live long enough to need it.
Fact: Life expectancy after age 65 is now 18.4 years, an increase of 5.6 years since 1940.2
Myth: Medicare will pay the bill.
Fact: Average annual cost in Pennsylvania for care in an assisted living facility is $30,984 to $38,532. Average annual cost for a Home Care Aid is $19,200 to $34,560. Average annual cost of living in a nursing facility is $82,855 to $85,0453.
Medicare pays only about 9% of home health and nursing home care in the United States. Medicare can approve up to 100 days in a nursing home. They will pay-in-full the cost for the first 20 days. From days 21-100, the recipient begins to pay, out of pocket, $128 a day. After 100 days, Medicare stops paying and you pick up 100% of the cost4.
Myth: I can rely on the government (Medicaid) to help me.
Fact: To some extent this is true; Medicaid is available for the impoverished for long-term care needs. There are disadvantages, however, including long waiting lists for admission, necessity of frequent moves to find adequate care, and the government determines the type of care received.
Long term care insurance:
- Protects your savings and investments.
- Takes the financial and emotional burden off your family.
- Allows you to maintain the independence that you've enjoyed your entire lifetime.
Long-term care insurance is not right for everyone:
You should NOT buy long-term care insurance if:
- You can't afford the premiums
- You have limited assets
- Your only source of income is Social Security or SSI
- You often have trouble paying for the basic bills
You should CONSIDER buying Long-term Care Insurance if:
- You have significant assets and income
- You want to protect some of your assets and income
- You want to pay for your own care
- You want to stay independent of the support of others
1 American Society on Aging - May 2003
2 Older Americans Update 2006: Key Indicators of Well Being, Federal Interagency Forum of Aging-Related Statistics, Washington, D.C., Updated May 2006.
3 The MetLife Market Survey of Nursing Home & Assisted Living Costs - October 2007
The MetLife Market Survey of Adult Day Services and Home Care Costs - September 2007
4 www.medicare.gov/Publications/Pubs/pdf/snf.pdf
For an informational packet or a no-cost, no-obligation consultation, please contact one of our financial advisors at 412-227-3200 or by clicking here.
We make your financial success personal.