How to Pay for Long Term Care, No Insurance or Savings Required

At this point in your life, you may not think it’s time to consider how you would pay for long term care, should you or your spouse need it. If your parents needed care, you might have gone through the exercise of planning with them…but what about for yourself? It is always better to start planning early, especially considering the high chance that you or your spouse will eventually need long term nursing care.

Statistically, someone turning 65 has a 70% chance of needing some form of long term care in their remaining years. Women typically need 3.7 years of care, while men need 2.2 years, on average. According to PWC, the average lifetime cost of formal long term care is $172,000.

The first thing you should think about when considering how to pay for long term care is what your optimal situation would be in the first place. Do you want to stay at home, or are you willing to move into a facility that will care for you? Do you live in an area that is cost effective, or do you need to move somewhere more affordable? What is your overall health like? These are the questions you should be asking first, so you know exactly what you’re going to need to pay for someday.

When it comes down to it, there are many different avenues to paying for long term care. Most people pay for long term care with either their own personal funds, through government programs, or with an insurance policy. Situations arise, though, where you may be ineligible for long term care insurance, or forced with the option of draining your life savings (and your loved ones’ inheritances) to pay for your own care. If you find yourself in one of these unfortunate situations, don’t panic just yet. There are still some options available to you:

Add a rider to an existing life insurance policy. If you do not qualify for long term care insurance, you may have the option to add a rider to a life insurance policy. There is something called “accelerated benefits” where you can use a portion of your death benefits for long term care. The benefits are usually capped at a specific percentage of the death benefits, and anything paid out for long term care is deducted from the amount given to beneficiaries after the policyholder passes away.

Veterans benefits. Veterans who have served in qualified periods of conflict, as well as their spouses, are entitled to receive financial aid–known as Veterans Affairs Aid and Attendance–to pay for long term care. This program offers up to $1,830 per month for anyone who has served as little as 90 days in the military during a time of war, and up to $1,176 for a surviving spouse.

Apply for Medicaid. The rules for Medicaid assistance differ in each state, but this government program will pay for long term care services (with a catch). It is best to reach out to an elder law attorney, due to the many nuances of this program. A qualified attorney can help you determine whether Medicaid Asset Protection Planning is the right path for you to take…but you’ll want to start this conversation sooner than later, as Medicaid has a strict 5-year lookback period that may render you ineligible for Medicaid when you actually need it. Medicaid Crisis Planning is available in situations where you or your spouse suddenly need long term care, but this should be a “plan B” to proper long term care planning now.

Open a health savings account (HSA). Workers who have qualified high-deductible health insurance plans can open an HSA to pay for future long term care costs. The money in an HSA rolls over year to year, and withdrawals are tax-free if used for qualified health care expenses.

This list is certainly not exhaustive of all the different and creative ways that exist to pay for long term care. To understand all of your options and get thoroughly prepared for the future, contact the Hailey-Petty Law Firm. Our primary goal is to ensure you receive dedicated attention to your unique legal needs, so you are set up for success now and in the future.

Contact the Hailey-Petty Law Firm

At the Hailey-Petty Law Firm, our primary goal is to ensure the success of your estate plan–and that means helping you through the process of choosing a trustee and supporting your family trustee through the trust administration process when the time comes. Schedule a free 30-minute consultation with us to learn how we can help you achieve peace of mind, and set your loved ones up for success in the future.