How will you pay for the cost of care?
The cost of care, whether at home or at a specialized facility, represents a financial burden that relatively few are ever prepared for. And with costs escalating, the problem is only getting worse. In the New York tri-state area, a year in a nursing home can cost well more than $130,000 each year. In 20 years that could be $260,000/yr.
You may have experienced this first hand with a parent or grandparent. You may be concerned about the burden that may fall on your children or about the potentially devastating impact on your accumulated assets / estate. Whatever the motivation, it is important to get educated about this issue and to plan accordingly.
Cost of quality care in affluent communities is far higher than the averages.
The duration of Alzheimer’s disease is generally four to eight years after a diagnosis, but can last as long as 20 years.
The cost of quality home care is also expensive.
One or more extended health care events requiring long term care services can be a significant drain one’s estate.
For those with minimal income and assets – Medicaid
For those with assets ranging $1,000,000 – $10,000,000
- Traditional Long Term Care Insurance,
- Asset-Based Long Term Care Insurance
- Other assets (cash, investments, asset sales, life insurance cash values, etc.)
For those with assets greater than $10,000,000
- Self-funding / Other Assets or
- A combination of self-funding and Asset-Based Long Term Care Insurance to protect against the potential catastrophic exposure of one or more extended long term care events.
Medicare – Only pays medically necessary care and focuses on medical acute care, such as doctor visits, drugs, and hospital stays. Applies to people 65 and older.
Medicaid– is a joint federal and state government program that helps people with low income.
Out of Pocket Spending– While most people are not financially prepared to handle the potentially devastating costs of a Long Term Care event, about 22% of LTC costs in the U.S. are funded out of pocket.
Private Insurance Options
- Traditional Long Term Care Insurance
- Cash Values or Accelerated benefits from Life Insurance Policies and Annuities
- Asset-Based, Hybrid Insurance Policies (Reallocating Current Assets to leverage larger benefits)