You Have Options When It Comes Time to Pay for Long-Term Care

Everything from your eating and exercising habits to your DNA influences your chances of needing long-term care as you grow older. And as alarming as it may be, Medicare does not pay for assisted living or nursing care. While we’re sheltering in place during COVID-19, this could be the perfect time to put together a long-term care plan. Here’s what you need to know.

Payment Choices

Independent, assisted, and skilled nursing care facilities aren’t cheap. Depending on your location and your desired level of service, you may pay around $42,000 a year or more — and many facilities require an entrance fee. When the responsibility for payment falls on your own shoulders, your options go beyond personal savings.

  • Real estate. While it may be less-than-desirable to your heirs, selling your home is one option that can help you cover your out-of-pocket expenses. If your house is fully paid for, the proceeds may be enough to ensure you live comfortably for years to come. And with homes in Culver City fetching $1.23M on average, these proceeds could be substantial.
  • Life settlement. A life settlement can help you turn your term or universal life insurance policy into cash. It’s not an option for everyone, and there are likely tax ramifications to consider. However, if your policy has a cash value of $50,000 and you don’t qualify for accelerated death benefits, it’s an asset worth considering.
  • Long-term care insurance. Long-term care insurance is not the same thing as life insurance. Instead of a death benefit, a long-term care insurance policy provides a set monthly amount paid toward assisted living or at-home care. It’s typically more affordable if you’re fairly young and healthy, although policies are usually available for people between the ages of 18 and 79.
  • If you’re low income, according to guidelines set by your home state, you may be eligible for Medicaid or other state-specific health care programs. Unlike Medicare, Medicaid may provide coverage for continuing care, although depending on your income, copayments or other monetary contributions may be required.

At some point, you will likely need some form of care. While this may not be provided in a facility, other quality-of-life services can cost just as much. For instance, if you choose to stay home and require extensive nursing care, this can cost you nearly $100,000 per year, based on 12 hours of direct medical supervision each day at a cost of $22 per hour. And this doesn’t include other supplemental services such as transportation and housekeeping.

What You Can Do

If your goal is to remain in your own home, take steps now that will increase your chances of being successful. Start by prioritizing your physical and mental health. You’ve no doubt heard advice your entire life about eating well and exercising. If you haven’t taken it yet, now’s the time. When you live alone you also have unique needs that you must consider. Social isolation in your golden years can trigger depression, which can be the beginning of a domino effect that leads to self-neglect. You will also need to make a commitment to visiting your doctor at least once per year and up keeping any health recommendations, including medications they offer.

In addition to self-care actions, there are many home modifications you can make to increase your safety. Adding a gentle-incline ramp to the front steps (installation costs typically range from $1,500 to $3,250), installing brighter lights throughout the home and updating your arsenal of technology to include smart home features. Technology may include hands-free appliance controls and video-monitored security.

Don’t get caught scrambling to pay for your late-life health needs. Take the time during COVID-19 lockdown to evaluate your assets now and know your options. A little research today can save you heartache tomorrow.