Are You Likely to Need Long-Term Care?
January 21, 2013 
3 Comments
Most people have a false perception of the facts.
What are the chances in your lifetime that you will need some form of long-term care medical assistance either in at an in-patient facility, part-time during the day, or even at home? If you were to need long-term care, would you be covered? Most people would not.
The great majority of Americans today have the false perception that they will never need long-term care. However, according to current statistics, 70% of those of you over 65 years of age will need some form of long-term care at least once in your lifetime. An additional 43% of you will spend some time in a long-term care facility with 21% of you staying in that facility 3-years or longer.1 Finally, 43% of those in the U.S. needing long term care today are under age 652.
So while your expected perception may be that you won’t ever need long-term care, the facts suggest otherwise. To make matters worse, today it costs about $78,000 annually for a private room in a long-term care facility. What will it cost 20, 30, or 50 years from now?
Once someone enters a long-term care facility, the average married couple exhausts their savings after just 13 weeks. Within two years, 90% of those married couples will be bankrupt.
But what about Medicare and Medicaid, won’t they help? Medicare only pays for long-term care if you are admitted to the facility within 30-days after a hospital stay of at least 3-days. Then only the first 20 days are covered at 100%. During days 21-100 you pay $144.50/day ($11,415). After 100 days, Medicare will not pay anything towards your long-term care needs.
Medicaid on the other hand is even more difficult to get coverage. To get Medicaid coverage you must be impoverished by your state’s definition. Commonly you can’t own any assets except for your car and your home. Even then the home is “seconded” to the state Medicaid program to pay back the money that is “loaned” to you to pay for your long-term care assistance. This money is not a gift and must be repaid out of your estate. Obtaining Medicaid coverage for long-term care should be discussed with a tax advisor because of the numerous laws and rules that are could cause Medicaid coverage to be prohibited.
What are your options?
The best option is to buy Long-Term Care Insurance to protect your assets when you are healthy and young. The younger you are the less expensive it will be. Besides traditional long-term care insurance, there are numerous other types of products available to you to help protect your assets. No matter what your age, any licensed Retirement Life Solutions Specialist can discuss your options and provide the best solution for your specific situation.
Your long-term care costs can present a significant challenge to your family. By planning in advance you can protect your assets and more importantly, you can protect your family from serious financial and emotional burdens.
1. 2012 Field Guide, National Underwriter
2. National Care Planning Council, retrieved here, Accessed 1-20-13
If they are being misled by the wrong facts about long term care insurance, it is advisable that they research for another good resource. I also agree that to protect the assets the best option is to acquire this. Clearly, there are lots of people who are having major difficulties regarding their properties because of the lack of knowledge of LTC when they are still young. Planning in advance is always recommended.
We agree with you and encourage all consumers to shop around and speak with a Retirement Solutions Specialist to learn all they can about Long-Term Care insurance (as well as all insurance products) to ensure the specific policy protects their situation. As you stated, buying long-term care insurance (LTC) at a young age is the best way to plan for unexpected events that could cause serious financial and emotional trauma to a family. However, no matter what age you are, having any amount of long-term care insurance is always better than not having any!