Planning Ahead for Long-Term Care

By Dan Jiles

As we age, many of us will need some type of health care assistance. But how do you know if you'll ever need "long-term care"?

Long-term care (LTC) is the assistance provided when a person is unable to provide for him or herself as the result of a disability or prolonged illness. It ranges from personal care at home to nursing services in a nursing home.  

Recent studies show typical nursing home expenses in Florida at $169 per day or $5,070 per month—over $60,000 per year! Long-term care insurance is paid for from your cash, your assets and your family's assets. For those without assets, it is paid for by Medicaid programs administered by the state government. More than half of nursing home bills are paid out-of-pocket by individuals and their families, and somewhat less than half are paid by state Medicaid programs. Surprisingly, Medicare pays less than 17 percent of all LTC expenses.

A long-term care insurance policy depends on your age, health status, overall retirement objectives, income and wealth. It is for those who have substantial assets to protect (over $100,000, not including your home); who want to stay independent and be able to choose the type of LTC they receive; or those who do not want to burden their families with LTC bills. Never buy a long-term care policy if:

On the other hand, Medicaid is a government program that is designed to provide comprehensive medical care, including nursing home care, to low-income individuals who are aged, blind, disabled, or members of families with dependent children. It is health insurance that helps many people who can't afford medical or long-term care expenses. 

To qualify for benefits, your assets and income have to be within certain limits set by the state in which you live. 

If you are placed in a nursing home, and depending on your income, Medicaid may only pay a portion of the monthly cost. The difference would be left up to you.

Back to top