Long Term Care (LTC) Insurance can’t prevent the need for care, but it’s a big help dealing with it!
- The first thing Long Term Care Insurance does is prevent you from going broke. LTC is very expensive. A nursing home is well over $100,000 a year. Forget the Money Magazine charts and surveys of “median” prices across the country. I see the local bills going out in the Midwest and $10,000 a month is very common.
The assisted living facilities, sometimes called CBRF or RCAC’s may let you move in for $3500 a month, but if you need care, $4500 to $5500 a month is normal. If you have dementia (which is half of all LTC) you can expect $7000 to $8500 a month bills.
How many of you can pay that bill for very long without going broke? The amount of money you might spend for one person, to pay for a year or a year and a half of care, could instead earn enough interest to pay for LTC insurance to cover both of you. However, choosing it appropriately is very important. You will want guidance from someone who specializes in this area, knows the actual costs, how care is used, and how to mesh the insurance in with your available income and interest so you don’t buy too much.
- The second thing LTC insurance does is become your entry ticket into the kind of care you want. Tom Bodette may leave the light on for me but I refuse to live in a motel 6.
The alternative to being able to pay for care is Medicaid. Medicaid is welfare. You do not get it because you are old, or disabled. You get it when you are broke. Medicaid pays much less than you do for care and the providers lose money on it. They can, and do, say no at the door if you are already qualified for it or soon will be (they have to – to stay in business). They cannot lose money on every resident and make it up in volume.Most assisted living facilities require you to prove the ability to pay for at least 2 years of care to gain entry. Some won’t take Medicaid at all and may require you to sign that you will move out when your money is gone before letting you in. Try and find someone to accept you then.
If you “wisely” gave away all your money years ago, when care is needed you might learn how “wise” that strategy was. Having the ability to pay, with lots of money you are willing to spend, or insurance to pay the bills for you, is your ticket in. I have mine, and it automatically gets larger every year to keep up with rising costs, do you have yours?
- OK, I indicated one more reason for LTC insurance and that is peace of mind. I do not worry about this. I can pay for whatever care I might need. If I never need care, I am as unhappy about that as I am about not having a bad car accident after many years of paying auto insurance premiums (knock on wood).
Every morning I look at my smart phone and see how many people looked at my website 3 or 4 hours ago. I know what keeps people up at night. I sleep pretty good at night, happy that I can help people through this. How well do you sleep?