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Blog Articles: What You Need to Know about Long-Term Care

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As retirees live longer, many worry about outliving their savings. However, many older Americans haven’t planned for a looming expense: the cost of long-term care.

When Rudy Beck of Beck & Lenox Estate Planning & Elder Law, LLC,  expanded his Estate Planning practice to include Elder Law, he began providing education on “What You Need to Know about Long-Term Care” to clients and via seminars.  Long-term care costs have continued to rise over the years, and naturally, have many Seniors greatly concerned.

According to Genworth’s 2020 Cost of Care Survey, the median cost of a private room in a nursing home was $105,850, and in-home care costs were $53,768 to $54,912 annually. CNBC’s recent article entitled “Most retirees will need long-term care. These are the best ways to pay for it” says these costs vary by location.

Although it’s hard to predict a retiree’s needs, the chances of requiring some type of long-term care services are high- about 70% for the average 65-year-old. Men typically need 2.2 years of care, and women may require 3.7 years.

Long-term care insurance may cover all or a portion of services. The premiums depend on someone’s age, gender, health, location and more. However, there’s a 50% chance someone won’t ever need their policy, the American Association for Long-Term Care Insurance estimates, and premium hikes can be costly. Premiums typically increase about 5%, every five years. Several insurance companies no longer offer long-term care policies for sale, as even they were unprepared for the sky-rocketing costs.

A hybrid long-term care policy is another option. These policies are part life insurance or an annuity and part long-term care coverage.

Seniors can buy a policy with an upfront payment, eliminating the risk of future premium increases and their heirs may receive a death benefit if they don’t need long-term care. However, it may be harder to compare prices for a hybrid long-term policy than standalone long-term care coverage.

Low-income retirees with assets below certain thresholds may be eligible for long-term care services through Medicaid. This is a growing part of Beck & Lenox’s practice, as is helping Veterans and widows of Veterans apply for VA benefits such as Aid & Attendance.

President Joe Biden also called for $400 billion in Medicaid funding for home and community-based care as part of the American Jobs Plan, and separately, House and Senate Democrats introduced bills supporting Biden’s agenda in June.

Here is a link to a Masterclass created by Beck & Lenox’s owner, Rudy Beck, if you would like to know more about him and how he helps those concerned about long-term care expenses.

Reference: CNBC (Aug. 26, 2021) “Most retirees will need long-term care. These are the best ways to pay for it”



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