The Different Funding Sources For Long-Term Care
By Michael Managhan
Long-term care is a growing concern for many people today, because people are living longer. There are more people turning sixty-five then turning eighteen. The question I ask people is how they will pay for long-term care if needed in the future. The cost is ranging from $40,000 a year to $100,000 a year depending on where you live. There are different funding sources available for long-term care and they will be discussed in the article. The funding sources range from family to personal assets, federal government and long-term care insurance.
The first funding source for long-term care is your family. Your family is affected the most because of the emotional decisions that must be made for the person needing care. Your family must decide where that person will receive the care needed. The different places can be home, assisted living, adult day care and a nursing home. The cost of each place can be very different based on the level of care needed for the person. The money for these different places will be paid by the family. This can cause a financial hardship for all the family members.
The second funding source is someone's assets, like cash, retirement money, and property. With the cost of care at $40,000 to $100,000 a year, the question is how long will someone be able to pay for this cost?
The third source is two programs of the federal government called Medicare and Medicaid. Medicare is based on your health and will pay for home health care for a limited time. Medicaid is based on your wealth and will pay only for nursing home care. Most people will qualify for Medicaid after they have spent down their assets and income. If you are married, the spouse at home can keep $2000 of income to live on and $100,000 of assets. If you are single all your assets are to be spent down to qualified. These rules for Medicaid are different for each state and I would call your local social security office to know your state rules.
The last source is long-term care insurance and has been around since the eighties. This policy is designed to give people options on the amount of money to available for long-term care and the different places where the money can be used. The money can be used for home health care, adult day care, assisted living and a nursing home. The amount of money sit aside for care will be decision by the amount of premium paid by the individual.
In conclusion, the idea of paying for long-term care can be very stressful based on the cost. Deciding on which funding source to use to pay for long-term care can be hard. It will be based on the individual situation on which source to use. The best way to decide is to talk to your financial person about which source would be best for your situation.
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