As helpful as Medicare is for many seniors, it won’t carry much of the load if you or a loved one ever need to move into a facility that provides assisted living or nursing care. That’s why it’s important to have other financial plans in place, and it’s never too early to start. From using private financing options to paying out-of-pocket, there are several ways to pay for care, and most people end up utilizing a variety of sources. This article will lay out a few of the most effective ways to pay for long-term care in a nursing home or assisted living facility.
Long-Term Care Insurance
Long-term care (LTC) insurance covers a broad base of long-term care costs. Depending on what type of policy you choose, the services you need, and the services that are covered, LTC insurance could be all you need to pay for care or it could be used to supplement other forms of payment. For instance, you can buy a policy that covers only nursing home care or opt for a policy that pays for a wide range of both in-home and facility care. If you consider LTC insurance, be sure to look at what several different companies can offer you. How much a particular policy costs typically depends on the coverage, your age at the time of purchase, and any additional benefits that are applicable.
Another option is to purchase burial insurance, sometimes known as final expense insurance. It is similar to life insurance, except that the payout is much smaller than that of life insurance. While a burial insurance policy is primarily used for the costs of funeral arrangements (funeral/memorial service, headstone, casket, etc.), it can also be accessed to cover medical bills, personal loans, mortgage loans, credit card bills, and other debts of the deceased. If you decide to purchase burial insurance, be sure to factor in the final arrangements you want and whether you want to use some of the funds to pay off other debts. This will help you choose the policy that offers the right amount of coverage you need.
It’s no secret that medical costs get higher as we age. And even though people 65 and older qualify for Medicare, you will quickly realize how limited its coverage is if you need to enter a nursing home or assisted living facility. That’s where Medicare Advantage plans come in. These plans are offered by private insurance companies, they cover the same medical costs of Medicare Parts A and B, and they often provide additional benefits (dental, vision, prescription drugs). One-third of people who have a Medicare plan use Medicare Advantage as well. Click here if you are interested in learning more about how these plans can assist you or your loved one with additional medical care coverage.
Paying out-of-pocket could be another option for paying for long-term care. Using money from a retirement fund or pension, money from investments, or money from selling your home are all viable methods. If you have an insurance policy with a high deductible, you may qualify to open a health savings account (HSA). These accounts allow you to use untaxed dollars to pay for a variety of medical expenses, such as deductibles, copayments, and coinsurance. As of 2018, you can put up to $3,450 per year in an individual HSA and $6,900 in a family HSA. Furthermore, unused money rolls over each year.
Although Medicare is limited in its coverage, there are options for paying for long-term care in a nursing home or assisted living facility. Look into long-term care insurance, burial insurance, Medicare Advantage plans, and personal funding to see if any of these methods could work for you. Remember that most people rely on a combination of sources. Most importantly, don’t wait — start preparing today for the possibility of needing long-term care.