Long-term care is expensive…protect your assets
When you look at the costs, you can see why most people can’t afford to pay for services out of their own pocket for very long. The average cost for a nursing home in Massachusetts is $273 per day excluding costs for therapy, rehabilitation or medications with stays averaging 2 ½ years. (Source: www.aarp.org) Assisted living facility costs vary widely ranging from $1000-$5000 per month depending on the type and quality of facility. The average cost for home health care averages $20 per hour. If you need 4 hours of care a day, that adds up to $29,200 per year. (Source: www.eldercare.org)
If you have a family history of certain chronic health conditions, you may be at greater risk making it more important to consider long-term care protection. If you are elderly, the main purpose is to protect assets for a spouse or other family members; therefore, you need to consider the amount of assets you need to protect in comparison to the cost of insurance. A common guideline used by financial experts is that premiums should not cost a senior more than 5% of their income; however, this is a general rule and you may have extenuating circumstances in which long-term care insurance would make sense.
Medicare does NOT pay for most long-term care services
It doesn’t pay for custodial care if that is the only type of care needed. Also, skilled nursing facility care is only covered on a limited basis, and if you do qualify, it only provides care for a limited amount of time and will require a co-payment after a short amount of time. Home health services are also approved only under certain circumstances with limitations.
Medicaid eligibility has strict low income and asset requirements
Medicaid, the government program that is currently the major source of funding for most long-term care, requires that you have extremely low income and assets. If you and your spouse have saved for retirement or have substantial savings that you hope to pass on to your family, but don’t have a plan in place to fund long-term care or protect your assets, the high cost of nursing home care will for the most part wipe you out financially and require the spouse not requiring care to have a significant change in lifestyle. More than half of those who enter nursing homes paying privately for care reach the low income and asset requirements in less than a year.
NOTE: This information is only a general description of the available coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements. Some coverage may be subject to individual insureds meeting underwriting qualifications and to availability within a state. For further information contact a Murphy Insurance Agency Associate.