The median annual cost of long term care in a skilled nursing facility in Richmond, Virginia is $99,648, according to a cost of care survey by long-term care insurance company Genworth. You can’t expect Medicare to cover it. Medicaid coverage doesn’t start in, for a single person, until the value of your assets is reduced to $2,000, says The Columbia [S.C.] Regional Business Report’s recent article entitled “Nursing home care requires advance planning.”
Many people don’t know that for a single person to qualify for Medicaid, your assets have to be spent down to almost nothing. Planning for long-term care includes both insurance and financial planning. However, the long-term care insurance options are limited. There are only a few providers remaining in the industry, but it’s worth the effort to see what they have.
Long-term care insurance is a plan that lets you pay a premium in exchange for coverage for a stay in an assisted care facility, full-scale care facility, or even at home. Without a policy, those financial costs can be catastrophic.
Because the cost of long-term care is so high, begin planning for your later years as soon as possible. It’s likely that in the next few decades, as the baby boomer generation requires long-term or assisted living care, paying for it will be a crisis.
For people who are starting to save for future care needs, financial planners earmark 10% to 15% of your income. If you’re older and see that you don’t have enough money saved, they advise that you put away at least 20% of your income. IRS guidelines include catch-up provisions for people older than 50 for IRAs and 401(k)s.
Some group insurance plans offer long-term care options. There are some additions for life insurance policies that could extend living benefits for elder care. You should plan on paying for three years of long-term care.
How to pay for skilled care is just one of the issues a family may face in later years. You also should have a will, advance directives, medical or health care power of attorney and durable power of attorney in place to help your family with difficult decisions. If you are concerended about the cost of long term care in a skilled nursing facility, you need more than a simple will. Remember to make sure the beneficiaries on your insurance plans are up-to-date, in consultation with your estate planning attorney or elder law attorney.
Talk to an attorney about late-life concerns.
It’s never too soon to develop some kind of plan that can ease the financial burden for you and your family.
Reference: Columbia Regional Business Report (March 10, 2020) “Nursing home care requires advance planning”