Long-Term Care Planning: What You Need to Know

Shawn Plummer

CEO, The Annuity Expert

It’s essential to plan for the future, including planning for long-term care needs. Unfortunately, many people don’t think about this until it’s too late, and they must pay thousands of dollars for nursing home care. This guide will discuss what you need to know about long-term care planning. We’ll discuss available services, how to pay for them, and more!

What Is Long-Term Care Planning, And Why Is It Important?

Long-term care planning prepares for the potential need for ongoing care and support as we age or in case of a chronic illness or disability. It involves assessing your current and future healthcare needs, evaluating potential long-term care options, and identifying ways to pay for those services.

It is essential for several reasons:

  • It helps ensure that you have the resources and support you need to maintain your quality of life as you age or deal with chronic illness or disability.
  • It helps you and your loved ones make informed decisions about your care and support if you cannot make those decisions yourself.
  • It can help you avoid spending down your savings or assets on long-term care, preserving them for your loved ones, or leaving a legacy.

Finally, it can help you take advantage of government programs and benefits that can help pay for long-term care services. Also, it can help you avoid burdening your loved ones and allow them to continue with their own lives.

Long-Term Care Planning: What You Need To Know (2023)

How Can Families And Individuals Create An Effective Plan For Long-Term Care

Creating an effective long-term care plan involves a few key steps:

  • Assessing needs: Determine what type of care may be needed and the potential costs.
  • Understanding options: Research the long-term care services available, such as in-home care, assisted living, and nursing homes.
  • Exploring funding options: Look into how long-term care will be financed, including private pay, Medicaid, and long-term care insurance.
  • Involving loved ones: Talk to family members and loved ones about what they want to see in a long-term care plan and how they can help.
  • Finding professional help: Seek out the help of an elder law attorney, financial advisor, and senior care manager to help guide the process and ensure that all legal and financial considerations are taken into account.
  • Tailoring the plan: Create a plan tailored to the individual’s specific needs and preferences, considering factors such as location, cultural background, and level of care needed.
  • Reviewing and updating: Regularly review and update the long-term care plan as needed to ensure that it continues to meet the individual’s needs and changing circumstances.

What Are The Different Types Of Long-Care Options Available?

There are several types of long-term care options available, including:

  • In-home care: Family caregivers provide this type of care in the individual’s home and can include services such as bathing, dressing, and meal preparation.
  • Adult day care: Adult day care centers provide a structured program of activities, meals, and health services for older adults who need assistance during the day.
  • Assisted living: Assisted living facilities offer a combination of housing, personal care services, and health care services.
  • Skilled nursing care: Skilled nursing care is provided in a nursing home and is typically needed for individuals who need more extensive medical care.
  • Hospice care: Hospice care is designed for individuals nearing the end of their lives and provides comfort and support for the individual and their family.
  • Palliative care: Palliative care is a specialized type of medical treatment specifically designed to bring comfort and improve the quality of life for individuals suffering from serious illnesses. It can be provided in any setting, including homes, hospitals, or long-term care facilities. This service helps those afflicted and allows their families to breathe easier knowing that they are receiving support and consolation during this difficult time.

Are There Any Resources Available To Help People Create And Manage Their Long-Term Care Plans?

Yes, there are several resources available to help people create and manage their long-term care plans:

  • Government agencies: The federal and state governments offer a wide range of information, health and human services, and resources to help older adults and people with disabilities plan long-term care. For example, the federal government’s website, the Administration for Community Living, provides information on long-term care planning, including benefits and community services available through Medicaid and Medicare.
  • Non-profit organizations: Many non-profit organizations, such as the National Council on Aging, provide information and resources on long-term care planning, including guides, worksheets, and online calculators to help you estimate your long-term care costs.
  • Professional advisors: Financial advisors, attorneys, geriatric care managers, and other professionals can provide guidance and advice on long-term care planning, including options for paying for long-term care and legal issues that may arise.
  • Insurance companies: An Insurance company will offer long-term care insurance policies to help pay for long-term care services. They can also provide educational resources and tools to plan and pay for long-term care services.
  • Online resources: There are also many online resources available, such as websites, blogs, and forums that provide information and support for long-term care planning.

Are There Any Government Programs That Can Help With Long-Term Care Costs?

Yes, several government programs can help with long-term care costs:

  • Medicaid: Medicaid is a joint federal and state program that provides health coverage for low-income individuals and family members. It covers a wide range of long-term care services, including nursing home care, in-home care, and adult day care. Eligibility for Medicaid is based on income and assets, and each state has its own rules and guidelines.
  • Veterans Affairs (VA) Aid and Attendance: The veteran benefits program offers monetary support to veterans and their surviving spouses who regularly require assistance in activities such as eating, bathing, grooming, taking medication, or using the restroom.
  • PACE (Program of All-Inclusive Care for the Elderly): This program provides comprehensive health care services to older adults who require long-term care services but wish to live in their own homes and communities.
  • State programs: Some states offer additional programs to help with long-term care costs. For example, many states have Medicaid waiver programs that provide additional services and support to help older adults and people with disabilities stay in their homes.
Long-Term Care Planning: What You Need To Know (2023)

How Does My Current Health Insurance Affect My Long-Term Care Planning?

Your current health insurance coverage can significantly impact your long-term care planning.

  • Private health insurance: Most private health insurance plans do not cover long-term care services. However, some policies may offer limited coverage for certain types of care, such as in-home or adult day care.
  • Medicare: Medicare, the federal health insurance program for people over 65, does not cover most long-term care services. It does cover a limited amount of skilled nursing care and some home health care services, but only under certain conditions.
  • Medicaid: Medicaid, the joint federal and state program for people with low income, does cover long-term care services, including nursing home care. However, Medicaid has strict eligibility requirements, and individuals may have to spend most of their assets to qualify.

Next Steps

Long-term care planning is essential for everyone, but people often don’t think about it until it’s too late. In this guide, we’ve discussed what you need to know about long-term care planning. We talked about available services, how to pay for them, and more! If you’re ready to take the next step in your long-term care planning journey, request a free quote from us today!

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Frequently Asked Questions

What Is The Annual National Median Cost For Long-Term Care Services, And How Does This Factor Into Long-Term Care Planning?

The Genworth 2020 Cost of Care Survey revealed that the yearly median costs for long-term care services differ based on location and the type of care. For instance, a private room in a nursing home will cost around $102,200 annually, whereas, at an assisted living facility, it is slightly more budget-friendly, with a median annual cost of just under $50K ($48,612).

If you prefer to stay within your residence while receiving assistance, then home health aide services are available at an average annual expense of approximately half that amount: $51,480.

Knowing the annual median cost for long-term care services can help you plan and budget for the potential need for long-term care; it also helps evaluate the options available and how much they would cost. It can also help you explore ways to pay for long-term care services, such as long-term care insurance, Medicaid, and veterans benefits.

What Potential Issues Should Be Considered When Developing A Long-Term Care Plan?

When developing a long-term care plan, several potential issues should be taken into consideration, including:

  • Health status: It is essential to consider your current health status and any potential health conditions that may arise. This will help you to determine what kind of long-term care you may need and how much it might cost.
  • Living arrangements: Consider your current living arrangements and whether you will be able to continue living at home as you age or if you may need to move to an assisted living facility or nursing home.
  • Finances: Long-term care can be expensive, and it is essential to consider how you will pay for it. This includes researching different types of insurance and government benefits that may help pay for long-term care.
  • Legal considerations include understanding the legal requirements and restrictions surrounding long-term care, such as Medicaid eligibility rules, and how they may impact your long-term care plan.
  • Family dynamics: If you are married or have children, it is essential to consider their needs and how your long-term care plan will impact them. This includes discussing your long-term care plan with them and ensuring they understand and are prepared to implement it if necessary.
  • Caregiver support: Long-term care often requires a caregiver’s support, whether a family member or a professional. It’s important to consider who will provide that support and how to plan for it.
  • Quality of life: Long-term care planning should consider the individual’s quality of life and the level of care they would like to receive. It’s essential to consider the individual’s preferences and wishes when developing a plan and ensure their quality of life is maintained.

How Can Life Insurance Policies Be Incorporated Into Long-Term Care Planning To Help Pay For Potential Care Costs?

Life insurance policies can be incorporated into long-term care planning in a few different ways:

  • Traditional life insurance policies: Some traditional life insurance policies include a long-term care rider, which allows policyholders to access a portion of the death benefit to pay for long-term care expenses. This can be a good option for those who want to use their life insurance policy to help pay for long-term care and provide death benefits for beneficiaries.
  • Hybrid life insurance policies: Hybrid life insurance policies, also known as “linked-benefit” or “long-term care insurance” policies, combine the features of life insurance and long-term care insurance. Policyholders can access the death benefit while they are still alive if they need long-term care.
  • Life settlements: Some people who own a life insurance policy they no longer need or can no longer afford may be able to sell the policy to a third party, known as a life settlement provider, for a lump sum of cash. The proceeds from the sale can then be used to pay for long-term care expenses.
  • Life insurance policies as collateral: Some people may use their life insurance policies as collateral for a loan to pay for long-term care expenses.

What Is The Community Spouse Resource Allowance, And How Does It Impact Long-Term Care Planning For Married Couples?

If a married couple has an institutionalized spouse that needs Medicaid long-term care, the Community Spouse Resource Allowance (CSRA) allows them to protect certain assets and income. Each state sets specific boundaries for this allowance, with 2021’s limit ranging from $25,000 to $126,420.

This provision offers peace of mind during a difficult time by helping couples preserve their financial security while getting quality long-term care for one partner. In addition, theIn addition, the assets the community spouse can keep will vary depending on the state; some states include the house, car, and personal property as part of the protected assets, while others do not.

This provision is essential for long-term care planning for married couples because it allows the community spouse to keep some assets and income. In contrast, the institutionalized spouse receives Medicaid benefits for long-term care. This helps to ensure that the community spouse will have some financial resources to maintain their standard of living while the other spouse is receiving long-term care.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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