The ColoHealth Health Wealth Newsletter
June 2019
Vol. 9, Issue 6

Start Early: Planning for Long-term Care Costs

Since last year, I have been talking about Financial Protection Program (FPP), where achieving Financial Security is as easy as six steps! Planning for long-term care costs is the fourth step in the FPP.

Long-term care is something no one wants to think about, but in order to achieve financial security, it’s necessary. You may think, “It’s never going to happen to me,” but no one is invincible, and hoping something doesn’t happen isn’t sufficient planning.

What is long-term care?

When people hear long-term care, many think of nursing homes. Yes, nursing homes are a form of long-term care, but they are not the only type.

Long-term care also includes in-home care to assisted living facilities to skilled medical professionals needed after surgery. Nearly 70% of people 65 and older will need long-term care at one point in their life. Those odds are pretty significant.

Don’t leave your health and finances up to chance.

Long-term care is expensive.

This is probably a no-brainer, but let’s talk about some numbers to put into perspective just how expensive long-term care is.

Costs of nursing home care can reach up to $100,000 a year! A qualified home health aide costs around $20.50 an hour, similarly $20 for homemaker services. These costs quickly pile up into a monstrosity of bills. In one year, it’s likely to drain your savings—assuming you have them.

Do you have $100,000 lying around? Most Americans would answer no. In fact, a third of Baby Boomers have between $0 and $25,000 set aside for retirement. That’s a drop in the bucket of expenses if you don’t have long-term insurance and end up needing it.

Medicare does not cover long-term care.

If you’re like many other Americans, you may mistakenly believe that Medicare will cover long-term care costs. Unfortunately,. Medicare does not cover long-term care, whether in a nursing home, assisted living facility, or in-home care.

Medicare does cover short-term care in a nursing facility 100% for the first 20 days, but after that, there is a daily co-pay of nearly $200. After 100 days, you are responsible for the full costs.

Who pays the costs?

If you don’t have long-term insurance, it’s likely that you’ll have to pay these costs out of your savings. Once those savings run out—and that’s a likely outcome—the financial burden will fall to your family. If you are completely destitute, Medicaid will pay for a facility, but I can assure you it won’t be top of the line.

Simply ignoring a potential problem could devastate not only you financially but the ones you love most. Don’t take that gamble.

The solution is long-term care insurance.

Long-term insurance is a safety net to protect yourself and your loved ones from financial ruin, as well as ensure you get the care you need should anything happen.

Having long-term care insurance increases the odds of you staying in your own home where you’re comfortable.

Plan sooner rather than later.

The sooner you sign up, the lower your locked-in rates will be and the more you’ll save. The lowest rates are available to those who sign up for a plan between ages 45 and 55, so don’t hesitate to start making these decisions now.

Questions?

If you have any questions or concerns or would love to learn more about our Financial Protection Program, contact your Personal Benefits Manager! We are here to help you through the process of signing up for long-term care insurance and make it pain-free. Don’t wait. Protect your peace of mind and secure your future now.

To your health and wealth,

Wiley P. Long, III
President – Colohealth

The Colohealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.