November is National Long-Term Care (LTC) Awareness Month, which educates the public on the importance of long-term care needs for those over 65 years and older to understand and prepare for the costs of health care for aging adults. Heritage’s Financial Professional and Partner Brent Fuchs discusses the common misconceptions about long-term care, and how to pay for it, with 47 ABC WMDT-TV.
- Medicare will not pay for most LTC expenses beyond 100 days or less.
- You are not automatically enrolled for Medicare, you have to enroll through the social security office.
- Medicare is not free, you have premiums, deductibles, copays, and coinsurance.
The type of care that most of those over 65 will need is home care, assisted living, or a nursing home. To qualify for any type of LTC, you have to be unable to do two out of six daily living activities, eating, bathing, dressing, transferring, toileting, or mobility. “70% of individuals over 65 will need some type of this care before they pass away,1” says Brent Fuchs, Heritage Financial professional and partner. He adds, “The average cost for in-home care is $60,0002 a year, assisted living is $70,0003 and if you have to go into a nursing home, it can be upwards to $120,000 a year so those are big numbers.4”
That’s why financial groups are emphasizing the need for planning for these costs. Which can be paid for by three different types of insurance.
The first is traditional LTC policies, similar to home-owners insurance or automobile insurance.
Hybrid policies, which can be used by taking money out of the policy when needed, used for life insurance benefits family members after you pass, or if you need LTC, it’s there to help as well.
The third type is an annuity of LTC rider, which is an investment with LTC benefits.
The earlier you start, the less expensive it is if you choose to insure against that risk cause that’s all insurance is, it’s ensuring risk and you want to push that off on an insurance company,” says Fuchs. He adds, “I’m hoping this month people kind of take a step back and look at their plans and realize that long-term care planning and awareness is one of the most important pieces to a retirement plan.” Fuchs also says his best advice, especially if you are an adult 50 and over is to start talking to your financial advisor now about your options.
2 The median yearly cost of in-home care in the United States in 2021 was $61,776 for a Home Health Aide and $59,488 for Homemaker services. https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-and-insights.html
3 Annual Median Costs of a Private One Bedroom in Assisted Living in Delaware. https://pro.genworth.com/riiproweb/productinfo/pdf/282102.pdf
4 Annual Median Costs of a Semi-Private Room in a Nursing Home Facility in Maryland. https://pro.genworth.com/riiproweb/productinfo/pdf/282102.pdf