Dealing With the Cost of Long-Term Older Adult Care

It is important to plan out how to cover long-term care costs. Special insurance, smart estate planning, and other steps can help you plan for your own long-term care or assist in planning for the care of senior relatives.

It is important to plan out how to cover long-term care costs. Special insurance, smart estate planning, and other steps can help you plan for your long-term care or assist in planning for the care of senior relatives.

According to a survey by Genworth, the monthly cost of an assisted living facility is $4,500, while a private room in nursing home care is $9,034. Home healthcare and living services hover around $5,000 per month.

These costs are quite high, and the increasing problem of debt among seniors makes covering long-term care costs more challenging.

Medicare and Medicaid are not always a solution. Medicare does not cover most long-term care services, and Medicaid will only kick in once all other resources are exhausted. Eligibility for these programs and health insurance can cause issues for loved ones.

What Is Long-Term Care?

Long-term care is care given to individuals when they cannot perform normal activities like cooking and eating, bathing, getting dressed, cleaning, laundry, and going to the bathroom without help. This assistance can come from professionals or other family members.

Often, people need long-term care because of specific health issues or advanced age. The goal is to provide enough assistance so that the person can still enjoy a good quality of life.

In addition to assistance with daily tasks, long-term care can include medical services, such as cleaning and checking equipment, administering injections and medication, and checking vitals.

This type of care is important for seniors to avoid dangers such as falls, accidents at home, or medication overdoses.

Types of Long-Term Care

There are different options for long-term care:

  • Home-based care can include both medical and non-medical services. A home caregiver can provide help with non-medical services such as running errands, cooking, cleaning, and household chores. A home health aide is a caregiver trained to assist with more medical-based tasks such as bathing, eating, checking vital signs, providing medications, and cleaning and using medical equipment.
  • Community-based care includes services that make it possible for seniors to continue living in their homes. This type of assistance includes transportation, meal deliveries, companion services, emergency response systems, and senior centers.
  • Facility-based care options are for people who must move out of their homes for the appropriate level of assistance. There are different options for facilities, each of which varies in the level of care patients need, whether that be independent living facilities that merely provide help for daily care activities such as housekeeping and transportation or retirement homes that provide 24-hour supervision and include medical care.

Some residential facilities offer different living arrangements in the same building or development so that people can transition to a higher level of care as they age.

Costs of Long-Term Care

Long-term care needs vary depending on a person's age, medical conditions, and personal care needs. Long-term care can be very expensive whether it takes place at home or in a dedicated facility:

  • Adult daycare, which is for people who have a family caregiver at home or need minor assistance, on average costs $19,500 per year.
  • Part-time care at home or in an assisted living facility hovers around $50,000 annually.
  • Nursing home rooms range from $90,155 to $102,200.
  • Round-the-clock home care is the most expensive option, at more than $175,000 per year on average.

The biggest question for most people is how to afford this level of care.

Long-Term Care Insurance

Many Americans will need long-term care at some point in their lives. About 47% of men and 57% of women who are currently over the age of 65 will need long-term care.

Long-term care insurance is one of the best ways to help handle the high costs of this type of service.

Long-term care insurance covers the costs associated with assisted living, nursing homes, or home healthcare services. It helps cover the costs not covered by Medicare so you can consider a policy even if you already have Medicare.

Costs for the policies increase as you age. In your 50s, premiums are $1,700 to $2,650 per year. However, most insurers will not accept applicants once they reach the age of 75. People who get a policy earlier in their lives will not only have a better chance of acceptance but they will also be prepared in case an emergency leaves them needing care sooner than expected.

Learn more about the benefits and risks of long-term care insurance through FindLaw's article LTC (Long Term Care) Insurance: Risks and Benefits.

How To Qualify for Long-Term Care Insurance

There are several requirements for long-term care insurance. One of the most important factors is your current health. You should apply when you are still in relatively good health. According to the American Association of Long-Term Care Insurance, you will not qualify if you have certain health conditions. These include kidney failure, dementia, lupus, Alzheimer's disease, or Parkinson's.

While there is technically no age limit to apply, your chances of approval are much better if you are in your 50s or younger.

Another reason to apply early is that you can get lower premiums by opting for a longer elimination period. The elimination period is the amount of time between acceptance and when the coverage kicks in. A 90-day period means you will have to pay for long-term care costs for three months before insurance takes over payments. However, if you are in good health, this wait will not be an issue, and you can get the lowest possible premium.

How To Apply for Long-Term Care Insurance

You can buy long-term care insurance directly from an insurer, broker, or agent. You can apply without committing to purchase a policy, so fill out several applications and compare premiums and coverage before accepting the best option.

The application process will include providing personal and health-related information and selecting the type of coverage you want. You then wait for an answer from the insurer.

A specialized long-term care insurance agent may be able to apply to several insurers on your behalf and find you the best offer more quickly than if you filled out separate applications on your own.

What To Do if You Are Denied Long-Term Care Insurance Benefits

If you have been denied insurance and you suspect your denial was in bad faith, you should take action. Insurers have been known to deny coverage in ways that are against their policy or even against the law. Some insurers will try to deny legitimate claims. If you have been denied benefits, consider seeking the advice of a lawyer. A lawyer can investigate your denial and help you take the appropriate next steps.

Medicaid Planning

In addition to long-term care insurance, it's important to think about Medicaid planning. Medicaid is a government program offering health coverage, including long-term care, to qualifying individuals. Planning for Medicaid involves arranging your assets and income to meet Medicaid eligibility requirements.

It's important to approach Medicaid planning with care, considering both legal and ethical aspects. Seeking guidance from an elder law attorney can help navigate the complexities of Medicaid rules, ensuring access to necessary long-term care without depleting financial resources entirely.

Long-Term Care and Estate Planning

Long-term care insurance is one aspect of planning for the future. You should also handle estate planning to manage long-term care costs and provide an inheritance to your family.

Here's a look at how estate planning and long-term care are related.

Why Should Seniors Plan Their Estates?

Estate planning can help you ensure that your family can benefit from your assets and property. Organizing your finances early can also ensure that your long-term care does not become a financial burden for your spouse, children, or other family members.

You can use wills, trusts, and joint accounts to ensure that each beneficiary gets the inheritance you want while setting up an account that will allow you to cover long-term care costs not included in Medicare and insurance coverage.

Trusts and What To Use a Trust For

There are several options for trusts:

  • Revocable trusts allow you to create a trust while you are still alive, sign over ownership of assets to the trust, and retain access to them. These trusts are flexible and allow you to avoid probate issues that could occur if you write a will. However, since you retain a connection with the assets, creditors may be able to get them if you have debts.
  • Irrevocable trusts cannot be altered or changed once they are created. This solves the problem of creditors having access to these assets, making this an inflexible option. They also do not count against Medicare and Medicaid income because you no longer have access or control over the assets. You can get more long-term care coverage from Medicaid and Medicare without giving up assets that would otherwise go to your beneficiaries.
  • A life insurance trust is a type of irrevocable trust that holds the proceeds of a life insurance policy. The policy gets paid out or used based on the guidelines that you set up during your lifetime.

Legal Help With Long-Term Care

With proper long-term care planning, you can cover long-term care costs without compromising your quality of life or your estate. Part of that planning should involve speaking with an attorney for legal advice.

It is best to work with an elder law attorney when you are setting up an estate plan with long-term care in mind. An elder law attorney can help with a range of different legal issues involving elder care, asset protection, and estate planning. 

Most elder law attorneys can also help prepare legal documents and estate planning tools, including durable power of attorney, living wills, conservatorships, asset protection trusts, and special needs trusts for older adults.

To find an elder care attorney near you, the National Academy of Elder Law Attorneys (NAELA) is a great resource, along with FindLaw's elder law attorney directory.

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