Financing Long Term Care: What Are Your Main 4 Options?
Approximately 12 million Americans receive services that assist with everyday tasks. Some receive this help from family, while others pay a variety of long-term care service providers. Some receive care both ways and often pay for the second through one of four options. These options may even cover regular check-ups with Sharon Albright dental clinic in LA or other dentists.
Understanding Long Term Care
First, what is long term care? Long-term care is a way to describe standing health care services required by aging individuals that aren’t due to temporary situations. These tasks can range in nature from assistance with cleaning to full-time, live-in carers who assist with many aspects of daily life. Long-term care is provided by home health agencies, spouses, children and friends, and family. Some aging individuals have a nurse who visits their home once or twice a week, others received this help from family members living in the same home. In some situations, healthcare services are paid for, and in others they’re performed for free by loved ones.
Medicaid and Veterans Health Administration
One of the most common options for financing long-term care is the use of government programs. Medicaid provides an option for self-directed services, where participants take responsibility for managing their care services. What this means is that they can choose who provides their daily living services rather than having these services assigned. For many aging adults, the most appealing part of this plan, called the Consumer Directed Personal Assistance Program, is the ability to pay a child or other family member for caregiving. Spouses don’t qualify as caregivers under this plan but do under the VHA’s plan.
Veteran Directed Care, according to the VA’s website, is a program in which veterans who qualify for assistance can self-direct their care services. The difference between the VA’s program and Medicaid’s program is that the VDC program is exclusively for veterans who require a nursing home level of care. For veterans who qualify for both the VDC and Medicaid, the appeal of the VDC is the ability to pay a spouse for care.
Long Term Care Insurance
Another common option for financing long-term care is insurance. Long-term care insurance policies operate much the same as other insurance policies. Policyholders pay a monthly premium, and the insurance company reimburses health care service costs not covered by other insurance policies. The National Institute on Aging suggests that the younger a person is when they purchase this insurance, the better. Costs are cheaper when policies are purchased before the need for long-term care arises. In addition, not all insurers provide coverage if a person waits until they are older to initiate the coverage.
Personal Savings and Investment
A fourth option for financing long-term care is paying out of pocket. Personal savings, retirement funds, Social Security payments, and income from investments are all common ways aging adults pay for care services. The downside of paying out of pocket is that expenses can quickly outpace the personal funds available. but government programs and insurance may cover these gaps. Like insurance, the earlier a person makes financial plans for potential care service needs, the better.
Like other long-term expenses, such as buying a house, financing long-term care requires planning. Unlike typical expenses, there are a variety of options other than paying out of pocket. Knowing what these options are, planning when possible, and having family, friends, or other trusted advisers can make creating a financial plan for long-term care fairly straightforward.