Created: November 27, 2022
Modified: November 14, 2022

A Little-Known Fact: Medicare Doesn’t Cover Ongoing Long-Term Care Expenses

If you’re like many of our clients, you’re making retirement health care a priority. It’s easy to overlook your potential need for long-term care (LTC), but it deserves a top spot on your list of needs and expenses. Planning for high-quality LTC services can be critical to your future well-being and financial security.

What are High-Quality LTC Services?

This form of non-medical care involves assistance with basic activities of daily living —bathing, getting dressed, eating, getting into and out of a chair and more—that’s required by scores of people who suffer from chronic conditions. When you’re young and healthy, it’s hard to imagine needing LTC, but there’s a high probability you’ll rely on these services as you age. Studies show 70% of people turning 65 today will eventually need this type of care.

The Costs of Long-Term Care

If you know someone who’s receiving LTC services at home or in a  facility, you may have heard the care is expensive. Indeed it is. The average monthly cost of a private room in a nursing home is a whopping $9,034 per month according to the Genworth 2021 Cost of Care Survey.  Receiving care at home is a relative bargain, at an average of $4,957 per month for a home health aide. 

What’s not so well-known is that Medicare, the federal health insurance program for people 65 and older, covers only a limited amount of LTC services. Most of us believe that Medicare will take care of all our health care needs in retirement, but that’s simply not true. If you develop a chronic condition that requires help with activities of daily living, Medicare will not pay for the care you need on an ongoing basis.

Coverage for Ongoing LTC Expenses

Who pays these enormous bills? Medicare and private health insurance won’t pick up the tab. They don’t provide coverage for ongoing LTC expenses. Medicaid will cover the cost of care, but you’ll have to spend down your assets and impoverish yourself before you can qualify. Putting a plan in place now is critical to affording high quality LTC and protecting your personal assets in the future. With a plan, you can earmark a percentage of future savings for LTC, create a trust, buy insurance, or combine all three. Planning many years in advance offers the most flexibility because the range of workable options will narrow as you age.

At Johnson Brunetti, LTC planning is an integral part of our retirement planning process. See how you can benefit from our experience. Contact us at 800-208-7233 and schedule a free 15-minute consultation.

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