Long Term Care Insurance or None At All
To ask who should buy long term care insurance (LTCI) is like asking someone if he cooks his own meals. Some people prefer takeout over cooking but when they have a tight budget they have no choice but to cook anything that’s available in their fridge. Now in long term care (LTC), you can choose to self-insure but after spending all of your money on care you can’t go to the kitchen and cook up something that will continue to finance your needs.
LTCI is not an option these days and you will agree with this statement if you are aware of the cost of care in your area. Every year the rates of nursing homes, community-based LTC facilities, and services offered by home health care agencies just go higher and more families are losing their homes as the value of their expenses on care is now bigger than their mortgage.
Financial advisers mean it when they say nobody’s nest egg will be enough for the current cost of care. In-home care recipients will be paying out around $100,000 in the next three years while families with loved ones in nursing homes can expect to fork out more than $300,000 for the same length of time. If a household has an annual income of $75,000 this won’t be enough to cover their living expenses and the LTC costs of a loved one who is receiving care at home or in a facility.
Who Should Buy Long Term Care Insurance?
Anyone who is anticipating care in the future, which is practically every single American, will definitely need some amount of LTCI coverage. If only a few can afford the current cost of care, no one will be able to pay obtain it out-of-pocket beginning 2030.
Reports have it that today’s LTC costs will rise fourfold in less than 20 years and if you are not ready when that time comes, you will end up under Medicaid if you’re lucky to get a slot with this federal and state health insurance program. Medicaid has been cutting back on its LTC expenses because its coffers almost dried up as a result of its billons of LTC expenditures in the past years.
Right now, individuals who are relying on state Medicaid programs for their LTC are confined to in-home care or community-based care. If an individual wishes to receive nursing home care, Medicaid has to examine his physician’s records rigorously to determine if he is eligible for this level of care.
Only two percent of the population 60 years old and older is willing to enter a nursing home because majority of the elderly population prefers to stay in their homes. However, the Department of Health and Human Services says about 40% of baby boomers will require some level of nursing home care sometime in the future. Should you be among them, see to it that you’ve set aside $1-million just for your LTC expenses as the average annual cost of a nursing home is predicted to grow to $310,980 or higher in less than 20 years.
Wondering who should buy long term care insurance is a waste of time because as you sit and analyze the state of health of each passerby that you see, LTC costs are gradually going a notch higher.
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