Medicaid may be able to help pay for long-term care. However, there are strict financial criteria that you must meet. Medicaid looks not only at your income but also at your assets. You need to significantly spend down your income (by paying for medical costs) in order to be eligible. Most people will have to purchase an actual long-term care insurance policy.
On average, long-term care (without insurance) can cost between $50,000 and $100,000 per year. But premiums can be rather expensive. A single, healthy 55-year-old man will pay approximately $1700 per year. They vary based on your age, health, gender, and marital status. You’ll be asked to fill out a questionnaire or undergo a medical evaluation. The older you get, the more likely you will be charged more. You may even be denied outright.
You may have to meet an elimination period during which you’ll be responsible for the costs. After that, there may be limits to your coverage. Your plan may have a time limit, perhaps up to three years. There may be a financial limit, possibly $300,000. You can also enroll in a plan with no limits but those tend to have much higher monthly premiums.
Certain long-term care plans offer benefits for married couples such as being able to draw from your spouse’s benefits once you’ve exhausted your own. Additionally, if you itemize your deductions come tax time, you may be able to deduct your monthly premiums.
- Activities of Daily Life (ADLs)
- Instrumental Activities of Daily Life (IADLs)
Activities of Daily Life
There are six basic ADLs that will usually be assessed:
Instrumental Activities of Daily Life
In addition to ADLs, long-term care plans may assess IADLs. These are more complicated tasks such as:
- Using a telephone
- Managing medicine
- Meal prep
- Managing finances
- Pet care
- Accessing transportation
- Personal shopping
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Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.