When you are preparing for retirement and beyond, considering how you will pay for long-term care should be an important part of your overall plan. Yet, too often people neglect to provide for long-term care and find themselves having to either self-insure or spend down their assets to qualify for Medicaid. This piece from NPR highlights some of the pitfalls.
Consider these facts. Studies show that 70% of people over age 65 will need some form of long-term care in their lifetime. The costs of this care can easily burn through your savings. According to a report by the AARP, the average private pay cost of a nursing home stay in 2012 was $88,000.
Long-term care insurance may be one way to help pay for these expenses and still keep your estate intact. Many states now have programs that make it easier for you to protect your assets from the costs of nursing home care.
For example, say you purchase a long-term care insurance policy at age 65 while in fairly good health that provides benefits of $125 per day for 2 years. At age 75 your health begins to deteriorate and you use up most of your insurance benefits paying for in-home care. Several years later, you need to enter a nursing home and want to know whether you can keep your home and still have your stay covered under Medicaid.
In Massachusetts, the answer is yes. As a result of a recently passed law, as long as you purchase long-term care insurance with certain minimum coverage, you may keep your home and still have your stay covered under Medicaid. This protection applies whether or not you use your insurance benefits before you enter the nursing home. Prior to the law’s enactment, people who used any of their benefits before entering a nursing home lost this protection because their coverage fell below the minimum standard.
While long-term care insurance can provide protection and piece of mind, it may not be right for everyone. There are a wide range of policies available offering different coverage options. Use this Massachusetts consumer guide to help you understand some of the pros and cons.
If you have questions about how to protect your assets from the high costs of nursing home care, contact Attorney Kristina Vickstrom at 508-757-3800 to discuss your options. We can help you evaluate long-term care insurance and determine if it makes sense for you.