long-term care

Should You Keep Your Long-Term Care Insurance Policy?

Q: A few years ago I bought a long-term care policy; it cost about $200.00 a month, which is a lot of money for my budget. A lot of people my age prefer not to pay for long term care, instead they expect government to take care of them. What is your opinion, please?

A: Thanks for writing me with your question about long-term care insurance.

Since you are over 70 years old, I think it’s a good idea to have that long-term care policy.

I know the $200 a month is a bite out of your budget, but perhaps you can tweak your budget elsewhere to free up cash flow in order to keep your coverage in force.

There are many reasons I think you’d be smart to have long-term coverage — and not rely on the government, like you suggested some of your friends plan to do.

For starters, about 20% of Americans over age 65 and older experience some form or chronic physical impairment, leading them to need long-term care. For people 85 and older, 55% of them need long-term care.

And remember, you can get long-term care in a nursing home, and assisted living facility, or even in your own home. But the cost of such care isn’t cheap.

The average nursing home costs about $50,000 a year, depending on the part of the country in which you live. Assisted living facilities often charge roughly $24,000 a year. And having a home health attendant even for just two or three days a week – to help with stuff like meals or getting you dressed – can run $1,000 a month or $12,000 a year.

So that $2,400 a year you’re paying for long term care coverage could really be financially beneficial if it helps you avoid these much greater costs I just mentioned.

Additionally, don’t be fooled into thinking that the government will pay for all your ongoing medical needs. It won’t.

In general, Medicare and Medicaid do not cover anywhere near the full cost of long-term care.

Medicare pays only about 12% for short-term skilled nursing home care following hospitalization. Medicare also foots the bill for some skilled at-home care, but that’s only in cases of short-term conditions — not for the ongoing care that many elderly, sick, or injured people require.

As for Medicaid, this federal program does pay nearly half of all nursing home costs.

However, you only get those Medicaid benefits immediately if you meet federal poverty guidelines. If you don’t qualify as being “poverty” stricken, then Medicaid benefits only kick in after you’ve exhausted all your savings.

Keep these points in mind when trying to determine if long term care coverage is financially feasible for you to maintain. The best decision is really made once you determine the risks and benefits of keeping – or dropping – your long-term policy. Good luck!

Scroll to Top

Stay Informed with Our Exclusive Newsletter!

Subscribe to our newsletter and never miss out on the latest updates, exclusive offers, and insightful articles.

We respect your privacy!