What Are the Main Ways to Pay for Long-Term Care?

The ways to pay for long-term care can vary depending on a person’s individual circumstances. Financing the cost of long-term care is a principal concern for many seniors. As people age, their physical and mental health begins to decline, and in some cases, individuals require a more involved level of care that goes beyond regular medical check-ups. Elderly persons or their loved ones who foresee that their health will necessitate a long-term care component should begin to consider how they plan to finance the services that will be needed. Across the country, the costs of long-term care can be exorbitant with the annual cost of nursing home care ranging between $93,075 and $105,850 a year. It should be noted that these rates will accelerate over the next few years, but even as they currently stand, few individuals can afford to cover these costs out of pocket. This is why it is crucial to begin planning for long-term care early and explore what options are available to finance this weighty expense. At Morgan Legal Group, P.C., our elder law attorneys have years of experience with assisting seniors and their families with planning for long-term care expenses. We have a wide breadth of knowledge with regards to the different choices that are out there as well as various planning strategies that can be advanced in order to secure a senior’s long-term care needs.
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If you or a loved is looking into long-term care and how to pay for it, reach out to our elder law attorneys at Morgan Legal Group, P.C. We’re here to help you find the right financing solution for your long-term care needs.
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While the national average for nursing home care costs falls between $93,075 and $105,850 a year, these figures can vary across different states and even from county to county. In the state of New York, a nursing home resident can expect to pay is around $155,924 annually. However, in some areas, such as Central New York, nursing home costs average $96,360 a year which is several thousand dollars less than the median. Another factor to consider when looking at the cost of nursing home care is what services are to be provided. For example, having a private room will cost more than other room types. In addition, some nursing homes charge separate fees for what they consider supplementary services such as physical therapy, speech therapy, and memory care.
Medicare is a federally funded healthcare program that provides health insurance for seniors 65 years of age or older. Part A of Medicare is designed to cover the cost of hospital stays, care in a skilled nursing facility, hospice care, and some home healthcare services. However, with some of these benefits, there is a limit to how long Medicare will cover their costs. For example, a Medicare recipient who requires care in a skilled nursing facility will only receive coverage for 100 days or approximately three months within a benefit period. After 100 days, a patient will have to finance the cost of their stay at the facility themselves.
When it comes to purchasing long-term care insurance, there a number of factors that can turn it into an advantage for some but a risk for others. It is estimated that around 20% of seniors will need long-term care for five years or more. However, one third might never require long-term care services at all. Another point to consider is that long-term care insurance premiums can vary in price depending on a person’s age, health, desired coverage, and other elements. A good time to seek coverage is when a person is in their mid-50s to mid-60s and in good health. Unfortunately, seniors with a debilitating condition will not qualify for long-term care insurance. Finally, a person’s financial circumstances should also be taken into account. For the most part, long-term care insurance is a viable plan for those with assets valued at $300,000 or more and whose monthly premium would amount to 5% or less of their monthly income. Establishing whether long-term care insurance is a practical solution can be confusing, and it is highly recommended for seniors to consult with an elder law attorney before deciding on this as a means of paying for long-term care.
Medicaid is a program that is funded by the federal government and is aimed at providing healthcare coverage for individuals with limited financial resources. Included in Medicaid’s benefits are different types of long-term care including nursing homes, assisted living, and home-based services. It is important to note, however, that Medicaid has stringent eligibility requirements as it is designed to serve individuals near the federal poverty level. In order to qualify for Medicaid, a senior’s yearly income cannot exceed $28,188. In addition, Medicaid has an asset limit for applicants that is set at $2,000 in most states. Many seniors find that they exceed Medicaid’s income and asset limits but cannot afford to pay for long-term care themselves. In cases like these, an elder law attorney can assist with developing an appropriate planning strategy that would allow an applicant to meet Medicaid’s eligibility requirements and receive the long-term care services they need.