The population of the United States is aging. The age 65-and-over population—estimated at 40 million and 13% of the United States population—is expected to increase to 72 million by 2030. Over the next 50 years, the population of Americans aged 85 and older is expected to be the fastest growing segment of society.
Even if medical science is successful in reducing the frequency of chronic illnesses in the future, in all likelihood, we will still see an aging population heavily dependent on all aspects of health care delivery systems, including nursing home stays.
Who Pays?
According to a recent estimate, the current national median cost of a private room in a nursing home is more than $90,000 annually, and the costs are expected to continue to rise. While your personal assets or Medicaid might cover the cost of a long-term nursing home stay for you or a loved one, a better option for your personal situation may be long-term care insurance.
Given the significant expense of a lengthy nursing home stay, your personal assets could disappear quickly. Furthermore, if you have any savings, you may not qualify for Medicaid, which is a government program designed to assist the poor. Under current rules, Medicaid eligibility generally requires “spending down” assets. In addition, many of the techniques (e.g., asset transfers) for shielding what would otherwise be considered countable assets, in order to qualify for Medicaid, have been severely restricted. Many people mistakenly believe that Medicare will cover long-term care. However, Medicare provides only very limited coverage (up to 100 days of skilled care), and Medigap policies generally will not pay for long-term care.
Long-Term Security
Given the limited public assistance available, it is important to plan for the possibility that you may require costly medical care in the future. Long-term care insurance pays for skilled, intermediate, or custodial care at a specified dollar amount per day for a certain number of days.
Skilled care encompasses around-the-clock care by a registered nurse under a doctor’s supervision; intermediate care is occasional nursing and/or rehabilitative care under the supervision of medical personnel; custodial care generally means assistance with activities of daily living (ADLs) (not necessarily provided by trained medical personnel).
The cost of long-term care insurance varies with the comprehensiveness of services included: the amount of the daily benefit, the duration of coverage selected, the amount of the deductible, and the elimination period (the number of days you must be in a facility before benefits commence).
While paying for long-term care can spell financial ruin for the unprepared, it need not do so if you have the additional financial security of appropriate long-term care insurance. You should, of course, seek professional advice as you plan for this possibility. That’s why The Wealth Guardians are here to help you develop a strategy to protect yourself – and your family.
Our Custom Retirement Paycheck Plan shows how to protect your retirement from the risks of unexpected market swings, tax changes, and health care expenses using a mathematically tested strategy to create lifetime income allowing you to stop worrying about outliving your money and get on with enjoying the rest of your life.
Let us show you in black and white a custom retirement income plan that is comprehensive, individualized and based on strategies that balance growth with downside protection. Get your Custom Retirement Paycheck Plan now!
Give us a call at our Charlotte office at (704) 248-8549, or our Clemmons office at (336) 391-3409. Or, click here to request a no-cost, no-obligation meeting.
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