Many of us will require some form of long-term nursing care during our retirement years, and often that will mean residency in a nursing home. But Medicare usually does not pay for this service, and a nursing home can cost several thousand dollar per month. That means we should all plan for the eventual cost of nursing home care, just in case we end up needing it.
Since Medicare won’t pay for a nursing home, the average person has essentially three options:
Qualify for Medicaid (or Medi-Cal in California). This state-funded healthcare program does pay for nursing home care, and will usually pick up many other out-of-pocket medical expenses not covered by Medicare. However, Medicare is a needs-based program, and you must qualify based on your income and assets. At times it might become necessary to mee with an estate planning attorney, who can help you make certain maneuvers with your assets so that you can qualify for Medicaid and get your nursing home stay covered.
Self-pay. If you have significant financial assets, you might opt to pay for a nursing home stay yourself. But we definitely recommend that you do the math on this decision well in advance of retirement. For most of us, a significant length of time in a nursing home could wipe out retirement savings and create a dire situation for our spouse or other family members, so don’t just assume you’ll cover the cost yourself.
Long-term care insurance. By purchasing long-term care insurance as part of your retirement planning, you can ensure nursing home coverage (or even coverage for in-home nursing care) in the event that you need it. But timing your enrollment in a policy is critical. The earlier you enroll, the lower your premiums. If you wait until an advanced age to enroll in a long-term care insurance policy, the premiums might be much steeper.
As always, we’re here to help you understand the limitations of your Medicare plan and help you make decisions around healthcare and finances. Call us to discuss the issue of nursing home care, and we’ll discuss plans for your future.