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Do You Need to Plan for Long-Term Healthcare?

On Behalf of | Oct 19, 2020 | Long-Term Care Planning, Long-Term Healthcare |

You spent years working toward your retirement. You built an investment portfolio, took care of your home and made the most of your company’s retirement planning. As ready as Baby Boomers are for their well-earned retirement, many people overlook the costs of long-term healthcare.

According to the U.S. Department of Health and Human Services, people over age 65 stand a 70% chance of needing long-term healthcare. If you do not account for these eventual medical necessities in your estate plan, you may risk your entire estate.

Options for covering medical needs

A 2016 survey found that the average rate for a nursing home room cost nearly $8,000 every month — an incredibly steep cost for those hoping to stop working. The best way to cover these expensive costs is through proper planning. A lawyer familiar with estate planning for preservation and care can help identify the best way to secure coverage without compromising your estate. Seniors turn toward the following solutions to secure late-in-life medical care:

  • Medicaid: Medicaid is a federal program that provides healthcare for low-income people and those over 65. Medicaid covers nearly all care, including nursing home costs, but offers little patient choice. Without other arrangements, securing this coverage may require liquidating your estate to meet the low-income threshold, compromising inheritances and investments.
  • Medicare: This federally funded emergency medical program can cover almost any need, including in-home care. Medicare offers comprehensive coverage, but only for a limited time.
  • Health insurance: Very few states support long-term health insurance policies anymore. Rising premiums priced these policies out of favor. Policyholders can expect to pay high monthly rates and will lose their money if the coverage goes unused.
  • Living benefits insurance: These newer hybrid plans combine life insurance and long-term healthcare. Lower monthly premiums allow policyholders to pay for continued coverage, and any unused cash will pay out as a death benefit.
  • Asset-based insurance: These plans center on a one-time investment. These assets accrue interest over time, tax-free, and pay out medical coverage when needed. You can take your investment back at any time or let the insurance company pay out the remainder as a death benefit.

You can secure coverage with careful planning

If you have not made plans for long-term healthcare, you risk losing much of your estate to costly medical bills. Proper planning with help from a local attorney familiar with long-term medical coverage can secure the coverage you need without destroying your legacy.