The cost of long-term care is high at the end of life, However, there are methods to cut down on the cost of care.
As per Census Bureau data from 2019, nearly 10,000 people will turn age 65 across the United States each year, therefore, there’s a good chance you’ve loved ones who are seniors within your family. Or perhaps you’ve reached retirement age. According to a Kaiser Family Foundation (KFF) study, one out of three seniors over this age will require care in a nursing home at some point throughout their lives. However, the costs of home health care for nursing residents is significantly greater than the typical annual income for most older adults.
This article will look at the things families typically pay in the form of a lump sum for long-term care and what programs provide it and the best way to budget for it.
Nursing homes are affordable
The cost of long-term care has increased significantly between 2004 and 2020. According to Genworth’s Cost of Care Survey, the cost of a private room at nursing homes has been up by 62 percent, and the cost of care at an assisted-living facility has grown by 79. Based on the Congressional Research Service, Americans have a total of an estimated $60 billion on long-term care costs (CRS).
The price can vary based on the location and institution. But, anyone who reaches 70 in the United States will spend an average of $138,000 for future long-term health care. As per the office of the Assistant Secretary for Planning and Evaluation, they or their family members would be responsible for nearly half the cost out of the pocket (ASPE). But, almost one in six individuals will need to spend more than $100,000 from their pocket. If medical treatment is needed the majority of people will have to pay for it.
Are nursing home care services included in Medicare or Medicaid?
The nursing facility is not usually provided by Medicare. The basic Medicare, however, on the other hand, will cover some medically required short-term nursing home care due to accident or illness.
Medicaid covers residents of the homes identified to be Medicaid Nursing Facilities. Based on KFF, Medicaid supported almost six out of 10 patients in nursing facilities in the year 2017. In the report by Associated Press, Medicaid paid an amount of $192 billion in long-term health expenses in the year 2019. (CRS). All applicants must pass an assessment that proves the need for care and also meet requirements for those with low incomes, in order to be eligible for coverage at a nursing home. The American Council on Aging publishes income guidelines by the state for seniors.
People who don’t meet the Medicaid income threshold could “spend to reduce” their assets and income. In determining eligibility for income, Medicaid does not usually take a house of a resident in the sense of an asset. But, Medicaid estate recovery schemes allow the government to offer the property when a person dies in order to recover expenses. Contact an elder law as well as a Medicaid attorney to help to determine the best options. If you are planning to leave assets to a family member or a relative, you might want to transfer your assets or set up the foundation of trust prior to registering in Medicaid coverage.
Other cost-coverage options for nursing homes options
As per the CRS report, CRS reports that the Veterans Health Administration paid for approximately a quarter of the long-term care services in the year 2019 which was close to $7 billion. Beneficiaries must enroll with VA Health, have a medical necessity, and meet other requirements.
The preparations for the nursing home
Planning for long-term care should be initiated whenever possible at least a year before retiring. It is possible to purchase an insurance policy for your own long-term needs to cover the costs of a possible nursing hospitalization. The earlier the policy is established, the lower the rates are likely to be.
Furthermore, there are some benefits to having a long-term health plan in addition to actual protection. If your premiums exceed the minimum amount, you may claim all or part of them as medical expenses when you calculate your tax burden. These deductions can aid in saving money on tax bills. Furthermore, some states have a partnership scheme that connects Medicaid with long-term qualifying private insurance. If you purchase an insurance policy through one of these schemes and qualify, you could be able to receive Medicaid benefits without the need to sacrifice the entirety of your assets in the event that your long-term care insurance benefits end.
Keep in mind it is possible that nursing care might not be the best choice if you or a loved one you love needs help. For instance, the National Institute on Aging has the following list of resources for elderly people and other cost-saving alternatives.