Future Issues with Paying for Long-Term Care
(5 of 7)
Future Issues with Paying for Long-Term Care
Difficulties with Medicaid
The future of Medicaid cannot be forecast precisely, but no one predicts that benefit qualification will become easier in the years ahead. It is also reasonable to be concerned that quality standards and regulatory enforcement might suffer under budgetary constraints. The point for planning purposes is simply that the future is a big question mark.
Things To Know
- Several years of care are likely to cost at least $100,000 (in today’s dollars), and probably far more.
- Addressing long-term care needs is part of good, overall financial planning.
Despite all the potential problems and uncertainty, there are those with the financial ability to consider alternatives who instead purposely arrange their affairs to qualify for Medicaid; it becomes their primary strategy for dealing with LTC if the need arises. Strictly as a matter of personal financial planning, this approach seems more unsound than it has ever been.
Shortcomings of traditional approaches
Traditional medical and hospitalization insurance also fails to provide LTC coverage regardless of the quality of the policies. The same is true of Medicare supplement ("Medigap") policies. Only LTC insurance covers LTC.
Few would argue that several years of care—whether in a residential setting or at home with aides—are likely to cost at least $100,000 (in today’s dollars), and probably far more.
Adjusting the current estimate for increases over the years until care is required results in a big number, even with moderate inflation. The wealthy are able to finance this LTC out of pocket, if they care to do so.
Looking forward
For most of us, however, paying for necessary care is likely to be a problem, unless we have planned for it. Therefore, addressing this possible need—through LTC insurance or otherwise—is simply a part of good, overall financial planning.
For those with time to plan for LTC expenses, it seems unwise to assume that Medicaid alone is a good "Plan A." There are better planning options, and LTC insurance is among them. But it is not for everyone, and even for those who should buy it, choosing the right policy involves a bit of effort.