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5 Ways to Help Pay for Senior Care

five stacks of coins
February 23, 2022 Long Term Care

Paying for long-term care is an epidemic proportion problem in the United States. You see, 70% of seniors will require some form of long term care, and only a small percentage actually plan for it.

Understanding how to pay for long term care before you need it can be extremely beneficial to ensure your spouse, kids, or other loved ones don’t have to deal with the burden and can survive beyond your passing.

Out of Pocket - 21.9%*

One of the most expensive ways to pay for care is to pay out of pocket with your own funds. However, this option does allow for the most flexibility in choosing where you want to receive your care as long as you have the funds to pay for it.

Paying out of pocket for other services in the community may also be an option. If there are certain programs or services in your community that help aging seniors, this might be a worthwhile investment so you can continue to live in your home while also receiving services you may need.

This is a good option for some if they have the financial flexibility or their children have the financial flexibility to fund the care.

Medicare

Many may assume Medicare will help pay for long term care but that is actually not true. Medicare is a health insurance program run by the Government that will help pay for some medical costs for those 65 and older. This program will not pay for long-term care but can help pay for other senior care that is more short term like staying in a nursing home for a few months to receive care for a hospital-related condition. You will not be able to use Medicare to help pay for care if you will need care for the rest of your life.

Find out which strategy works best for you by using our free planning wizard which will outline your planning options within minutes! 

Medicaid - 62.2%*

Medicaid was created for individuals who could not afford to pay for care. For seniors, this can be an option to help pay for care if you:

  • Failed to plan ahead for long-term care
  • Need care immediately
  • Don’t want to go broke paying for your long-term care

Using a Medicaid Compliant Annuity can help you achieve Medicaid eligibility much faster and will help you spend down your excess assets so you won’t deplete your nest egg paying for care. Without using this annuity, it becomes a lot more difficult to use Medicaid to pay for care.

If you plan to use Medicaid to pay for care, you may want to find a Planner to help because the requirements are very specific and if not done properly can lead to a lengthy penalty period where you have to pay for your own care.


Read More: Medicare vs Medicaid: Paying for Long Term Care


Reverse Mortgage

A reverse mortgage is another way you can help pay for long-term care. You will use the funds from your home mortgage to help pay for any care you need. While we don’t recommend using a reverse mortgage because you will have to pay back the funds you receive, it may still be an option for your situation.

Long-Term Care Insurance

Long-term care insurance is an insurance policy that will help pay for your long-term care when you need it. You will pre-pay for this insurance while you’re healthy and if you ever require long-term care, then you can use this insurance to pay for certain services or facilities. With long-term care insurance, should you never require long-term care, you will not receive any of your money back.

If you’re able to plan ahead, Long-Term Care Insurance can be extremely beneficial. Benefits of LTCI include:

  • Protect your nest egg
  • Avoiding the financial burden of long-term care
  • Reduce burden on family
  • Choose what kind of care you want to receive in the future

Read More: What is Asset-Based Long-Term Care?


*According to thescanfoundation.org

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