Addressing long-term care needs is a common concern for Americans as they age. Older adults often cannot afford the expenses of long-term care out of pocket. Instead, they rely on insurance to help them cover their costs.
While many older adults are eligible for Medicare coverage during retirement, Medicare policies do not always cover the costs associated with long-term care. People have to apply for Medicaid if they intend to use government insurance for long-term care expenses.
In some cases, older adults may have private insurance coverage that helps them cover long-term care costs. Is long-term care insurance a smart investment for those preparing their budgets for their golden years?
Long-term care insurance may not be affordable
The age at which people apply for long-term care insurance, their current medical condition and the amount of coverage they get are key factors when evaluating how cost-effective these policies are. For many aging adults, long-term care insurance is not a cost-effective solution.
They may spend hundreds of dollars per month on this insurance. Working those premiums into a retirement budget can be quite difficult for older adults. People who purchase policies before they reach retirement age may be able to lock in more affordable premiums.
However, most older adults thinking about their long-term care needs in the near future may find that private insurance coverage is not the best or most realistic solution given their finances. Instead of trying to purchase a long-term care insurance policy, adults preparing for retirement may instead want to plan to qualify for Medicaid if they have long-term care needs later in life.
Reviewing an estimated budget and current financial resources can help people determine whether long-term care insurance should be part of their elder law preparations. It can also help to have legal guidance.
