Long Term Care Insurance - What Does it Cost to Be in a Nursing Home?
If you have Long Term Care insurance (LTCi), not much.
If you don't have it, it can cost you everything you have, and maybe everything your family has.
First of all, only 13% of the people receiving Long Term Care today are in a nursing home, so we are talking about something that may or may not apply to you.
Would you like me to put a dollar amount on that 13%? In 2010 dollars, almost $7,500 per month! That's $90,000 in a year.
Inflation projections, for the same care by 2030, predict that $90,000 will be more than tripled, around $300,000 per year.
If a three year stay is still the national average for a nursing home at that time, the $270,000 in today dollars will be almost One Million Dollars.
How old will you be then? Remember, the average stay today is about three years.
That means that some people will live for FIVE YEARS at $300,000 per year.
So if you don't have the Long Term Care Insurance, what do you do? Will you have a million dollars that you are going to be willing to give to a nursing home? If not, you have a couple of choices.
My first choice would be Get the Insurance.
Get it at work or get it through an agent, but Get the Insurance! If you can't afford full coverage, you need at least a minimum coverage and you can pay the difference towards the Long Term Care bill.
That will extend your position a lot.
Look at a 180 day waiting period instead of a 30 day wait; look at $100,000 lifetime benefit instead of $1,000,000.
Don't take the inflation coverage, even though it is very important.
Options like this are very useful if you simply cannot afford full coverage.
These are your best choices, as long as you get the coverage.
What do you do without the insurance? Your choices are really limited and not very desirable.
You will have to sell all of your assets and use the cash to pay for your care.
That becomes an underfunded position, and eventually you will still lose your teeth, because there you are with no place to live (you already have sold your house and entire estate) and still need care.
That is when you apply for one of the subsidy programs for indigents.
Medicaid will not pay any portion of your log term care as long as you have assets.
Nothing.
Plus, they go back five years to see if you transferred any assts to avoid having to sell them to pay for your care.
That means that you can't quitclaim property to your family to save it.
You have to be without assets to qualify for Medicaid.
If you have transferred any property to your family in good faith, and need long term care within the five year window, Medicaid will require that the property be returned to you and sold so you can be penniless in your old age.
Then and only then will they pay for your long term care.
You may have given your kids your house, and they are living in it, but Medicaid will not let them keep it.
If you didn't think LTCi was important before this, maybe now you may understand how important the insurance is.
There is an additional bright light to having the Long Term Care insurance.
It's called a State Partnership Program.
Most States have a partnership program that will allow you to protect your assets up to the amount of LTCi that you have.
For instance, if you have $100,000 in a long term policy, then if the money is used up, the State will allow you to keep $100,000 in assets when you go on a Medicaid program.
The rules on this vary State by State, so speak to a Certified Long Term Care Insurance Specialist to get the restrictions specific to your State.
If you don't have it, it can cost you everything you have, and maybe everything your family has.
First of all, only 13% of the people receiving Long Term Care today are in a nursing home, so we are talking about something that may or may not apply to you.
Would you like me to put a dollar amount on that 13%? In 2010 dollars, almost $7,500 per month! That's $90,000 in a year.
Inflation projections, for the same care by 2030, predict that $90,000 will be more than tripled, around $300,000 per year.
If a three year stay is still the national average for a nursing home at that time, the $270,000 in today dollars will be almost One Million Dollars.
How old will you be then? Remember, the average stay today is about three years.
That means that some people will live for FIVE YEARS at $300,000 per year.
So if you don't have the Long Term Care Insurance, what do you do? Will you have a million dollars that you are going to be willing to give to a nursing home? If not, you have a couple of choices.
My first choice would be Get the Insurance.
Get it at work or get it through an agent, but Get the Insurance! If you can't afford full coverage, you need at least a minimum coverage and you can pay the difference towards the Long Term Care bill.
That will extend your position a lot.
Look at a 180 day waiting period instead of a 30 day wait; look at $100,000 lifetime benefit instead of $1,000,000.
Don't take the inflation coverage, even though it is very important.
Options like this are very useful if you simply cannot afford full coverage.
These are your best choices, as long as you get the coverage.
What do you do without the insurance? Your choices are really limited and not very desirable.
You will have to sell all of your assets and use the cash to pay for your care.
That becomes an underfunded position, and eventually you will still lose your teeth, because there you are with no place to live (you already have sold your house and entire estate) and still need care.
That is when you apply for one of the subsidy programs for indigents.
Medicaid will not pay any portion of your log term care as long as you have assets.
Nothing.
Plus, they go back five years to see if you transferred any assts to avoid having to sell them to pay for your care.
That means that you can't quitclaim property to your family to save it.
You have to be without assets to qualify for Medicaid.
If you have transferred any property to your family in good faith, and need long term care within the five year window, Medicaid will require that the property be returned to you and sold so you can be penniless in your old age.
Then and only then will they pay for your long term care.
You may have given your kids your house, and they are living in it, but Medicaid will not let them keep it.
If you didn't think LTCi was important before this, maybe now you may understand how important the insurance is.
There is an additional bright light to having the Long Term Care insurance.
It's called a State Partnership Program.
Most States have a partnership program that will allow you to protect your assets up to the amount of LTCi that you have.
For instance, if you have $100,000 in a long term policy, then if the money is used up, the State will allow you to keep $100,000 in assets when you go on a Medicaid program.
The rules on this vary State by State, so speak to a Certified Long Term Care Insurance Specialist to get the restrictions specific to your State.
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