Long-Term Care Myths

While the need for long-term care is something that no one hopes for, the truth is that someone turning 65 today has a 70 percent chance of needing long-term care services or support in their lifetime. This is why it’s so important to be financially diligent with healthcare aging needs and to understand the facts about long-term care.

Do you know the facts about paying for long-term care? There are myths circulating which is why it’s more important than ever before to educate yourself on the truth about long-term care so you can proactively plan your finances for a successful retirement.

Four Long-Term Care Myths Debunked

While roughly one-third of today’s seniors may never need care, 20 percent will need it for more than five years. Paying for those kind of care services can cause a great financial burden. The problem is that many Americans don’t understand the facts about long-term care costs and benefits. It pays to know the details about long-term care so you can plan for future needs.

Here are four long-term care myths debunked:

Myth #1: I have to have no assets to qualify for Medicaid.

Reality: Medicaid qualifications differ depending on state law, but in most states you are not permitted to keep more than $2,000 in countable assets to receive Medicaid. However, there are certain assets people can keep and still qualify.

Assets counted for Medicaid eligibility often include,

• Bank accounts
• Stocks and bonds
• Property other than primary residence
• Certificates of deposit
• Additional cars (other than personal vehicle)

long-term care services often include,

• Burial spaces
• Business or trade property
• Household furnishings
• Life estates
• Personal property and household belongings
• Primary residence
• Burial spaces and funerals
• Personal vehicle
• Assets held in specific types of trusts

Additionally, the non-applicant spouse can keep some of the couple’s countable assets according to the Community Spouse Resource Allowance.

Myth #2: Medicare or other health insurance will pay for my healthcare expenses.

Reality: In most cases, Medicare will not cover long-term care because Medicare does not cover custodial and/or intermediate care like assistance with activities of daily living. Medicare will cover in-home care from a nurse, therapist, or social worker but only for up to 21 days. In a skilled nursing facility, Medicare will pay for the first 20 days. For days 21 - 100, Medicare will pay only a portion and the beneficiary pays $170 per day. Generally speaking, other forms of health insurance do not cover long-term care services either. Some plans provide minimal care and benefits but most are short-term. long-term care insurance can be purchased to help alleviate some of the long-term healthcare costs.

Myth #3: I won’t need long-term care. I am healthy enough, young enough, and even if I do get sick, my family will help me.

Reality: Most people turning 65 today can expect to use some form of long-term care during their lifetime. For people under the age of 65, accidents or chronic illness can lead to unexpected long-term care needs. In fact, the U.S. Department of Health and Human Services (HHS) estimates that nearly 8 percent of people between 40 and 50 have a disability that could ultimately require long-term care. And, while it is true that most people can live at home longer with the help of family and friends, there may come a time where unpaid family caregivers are no longer able to help. If care needs exceed what family can do, long-term care is the next viable option. Ultimately, we do not know the future and the numbers suggest that it is best to plan for long-term care services.

Myth #4: My savings are enough.

Reality: Even if you have retirement savings, it still may not be enough to cover long-term care costs. A report from Genworth found that the national median for a private room in a nursing home is $8,635 per month. For a home health aide, the national median is $4,195 per month. These costs typically exceed what the average retiree can afford each month.

If you are concerned about affording long-term care in your retirement, connect with a fiduciary financial advisor. A fiduciary financial advisor can give you an honest assessment of your finances now and help you plan for the care you may need down the road.

Related Articles

• Reasons Why Working Longer Offers Great Benefits
• Top Retirement Healthcare Costs for Retirement
• The Importance of Portfolio Management as Retirement Approaches