In Your Prime: Medicare and long term care insurance; how they work together

While it may be hard to think of now, it’s likely that you’ll need some type of healthcare or daily living assistance as you age. People often think that Medicare covers long-term care, either at home or in a nursing facility, but unfortunately, that’s not the case.

Medicare doesn’t cover assisted living, skilled nursing, or long-term care.

Paying for this type of care out-of-pocket is tremendously expensive and can deplete a lifetime of savings in a flash. As an alternative to draining your nest egg, Medicare and Long-Term Care Insurance can work together to ensure you have the necessary resources and services available when you need them most.

Here’s how:

Medicare Benefits - Medicare offers some care services, so when possible, it’s best to take advantage of those benefits first. After a three-day hospital stay, Medicare will pay for the total cost of Skilled Nursing Care (SNC) for the first 20 days in a skilled nursing facility, after that you pay around $200 co-insurance per day. After 100 days, Medicare assistance stops. If you’re unable to leave your house for medical or therapeutic care, Medicare will pay for home health care services. Importantly, Medicare will not cover 24-hour care.

Long-Term Care Insurance - Long-term Care (LTC) Insurance is designed to cover long-term services and support not covered by traditional medical insurance or Medicare. It can include a variety of benefits for individuals who need constant medical attention and/or custodial care with daily activities like eating, bathing, or mobility in facilities from assisted living to full-time, in- home custodial care to a private room in a nursing facility. Policies like this reimburse long-term care beneficiaries a daily amount for services.

The cost of a long-term care policy is based on age, desired benefit amount and any additional benefits you choose to include. That’s why it’s important to determine your long-term care needs and level of protection before it becomes an emergency.

Considering long-term care is a cornerstone in any financial plan, and there are many options to choose from based on your financial situation and needs. Let’s discuss starting preparations for, or reviewing, your potential long-term care needs. It’s better to be overprepared and covered, than underprepared and financially devastated.

Retired Air Force Colonel Jose “Rafi” Rodriguez is the president of Ask Rafi Retirement Lifestyle Solutions.


A checklist

To measure your progress toward retirement preparation, check off your “Done” items from the list below.

Retirement Budget

Understand what your income will be, and how you can confidently spend the money you have accumulated for retirement.

Emergency Savings

Prepare for emergencies by saving at least 3 months’ living expenses, and have that money easily available to you.

Tax Strategy

Have a sound tax strategy to guide you through the process of spending money from both taxable and tax-deferred accounts.

Lifestyle & Location

Consider where you’ll live, both short- and long-term. Have a plan for funding a move and understand the timing involved.

401k Strategy

Have a strategy for your 401(k) plan and determine the best time for you to access the money, based on your goals.1

Bucket List

Write down your personal goals for your retirement years. Explore your dreams, priorities and values.

Extended Care

Make arrangements in the event that you or a loved one encounters a health issue requiring full-time care.

Estate Strategy

Develop an estate approach that includes how you want your assets to be allocated, and who will handle your estate.

Health Insurance

Understand your options with Medicare and define a strategy for covering health care expenses for the long haul.

Social Security Strategy

Have a sound tax strategy to guide you through the process of spending money from both taxable and tax-deferred accounts.

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