The growing number of baby boomers reaching retirement age has caused many people to re-examine their retirement plans in light of long-term care costs. As people age and their needs change, many of them have to go into a nursing home or assisted living environment to receive necessary care and assistance. What many people don’t realize is that the costs associated with such long-term care are usually something they have to pay for out of their own pocket. Unless you are able to qualify for government aid through Medi-Cal, you can’t use government assistance to pay for your nursing home or other long-term care expenses.
Long-Term Care Costs
So how much will you have to pay if you need a nursing home? That answer depends on multiple factors, such as where you live, the type of facility you use, and the type of care you require. In general, however, nursing home care costs in California can cost $90,000 or more depending on your location. If you choose more expensive options, such as having a private room, costs can exceed $100,000 a year or more.
Long-Term Care Likelihood
How likely is it that you will need to obtain care to a nursing home? Again we can look at statistics for the answer. People who are 65 and older have a 70% chance of requiring long-term care at some point in the future. Not only that, but 40% of people who are in long-term care facilities right now are between the ages of 18 and 64. Further, 80% of people who are in a long-term care facility will require care for five years or less.
The chances that people need long-term care increase as they get older and as medical technology continues to allow them to live longer lives. Yet the longer you live, the more likely it is you will need long-term care. If you’ve developed a retirement plan that hasn’t taken long term care into consideration, this is a serious problem.
For example, many people who realize that they need to address long-term care costs consider long-term care insurance. Unfortunately, the chance that you will be denied long-term care insurance increases dramatically as you age. For example, people who apply for long-term care insurance when they are between the ages of 70 and 79 get denied coverage about 45% of the time. If you wait until your 80s to apply, that coverage denial rate increases to over 60%.
Unfortunately, the Medicare program provides little assistance for most long term care expenses.
Some wartime veterans and their surviving spouses may be able to obtain benefits through the VA to assist with payment for care.
Other people rely on Medi-Cal to pay, even though qualifying for Medi-Cal is not something you can automatically do. In order to use Medi-Cal to pay for long-term care expenses you have to meet very strict eligibility criteria.
Regardless of your particular circumstances, paying for long-term care expenses is a potentially significant problem. Creating a long term care planning strategy is a critical part of planning for one’s future. An experienced and qualified elder law attorney is the person to consult to help develop such a plan.