Who pays for nursing homes?
You will pay for your nursing home care. One of the biggest misconceptions held by Americans is that Medicare will pay for their nursing home, but Medicare will only pay 100% for the first 20 days but only for skilled care nursing home, and will not pay for assisted living, or in home care. Private health insurance policies do not cover nursing homes.
Why should I buy Long Term Care Insurance?
With modern medicines keeping people living to an average age of over 80 years old, most people will reach a point where they are no longer able to take care of themselves. They may suffer a stroke, be disabled from a fall, or have a chronic or debilitating illness such as Alzheimer’s or cancer. Statistically today, 75% of people 65 or over will need long term care. A year in a nursing home averages around $80,000 and can cost an astounding $244,550 a year, according to a Genworth annual care cost survey of 2015. They are projecting that the annual average cost of a nursing home will be an average of $190,000 a year by 2030.
Long Term Care as an Investment?
Financial advisors will typically misunderstand Long Term Care Insurance and may provide bad advice because they specialize in investments, not Long Term Care planning. Long Term Care Insurance is a protection, and not an investment. If you have assets to protect, and you can afford the premiums, then if you would be wise in purchasing a Long Term Care policy, because if you don’t you or your spouse may end up indigent in a public institution with just a $40 a month allowance. The only way to 100% protect your assets, without gambling, is to buy a Long Term Care Partnership policy for the value or the future value of your estate, because Medicaid will ignore will disregard those assets. (Click here for information on LTC Partnership policies).
- If for example a healthy 55 year old man who buys a policy with a 5% compounded inflation protection would pay approximately $2190 a year for a $150 daily benefit for three years. The policy would start out with a pool of $164,250 (36 months x $150 a day) but in 15 years would pay approximately $328,500 in benefits. However the 55 year old man who is now 70 years old would have only paid $32,850 over time in premiums for his $328,500 benefit which is 10 times the amount he paid into the policy, and he would have sheltered $328,500 of his assets from Medicare if the policy was a Partnership policy.
In 2015, you can deduct the amount of your total medical expenses that exceed 10% of your adjusted gross income (AGI) or 7.5% if you or your spouse is 65 or older. The portion of the Long Term Care Insurance premium that is deductible is determined by your age. In some cases, if you itemize your taxes, you may be able to deduct the premium. The benefits you receive from Long Term Care policies that are Partnership policies are not taxable.
Let Long Term Care USA send you information comparing the premiums of all the major “blue chip” Long Term Care Insurers in the mail so that you can determine in the comfort and privacy of your own home without any obligation the details of protecting your estate for your spouse and your loved ones. Just click the button below.
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Carriers quoted will vary from state to state.)