When you are going through life and you have health insurance, you probably do not have any major concerns. Yes, there can be some out-of-pocket expenses, and no one wants to get sick. At the same time, you have insurance to prevent any financial catastrophes.
This mentality can carry over when you are thinking about your elder years. You will qualify for Medicare at the age of 65, so you may assume that Medicare will pay for everything, including long-term care.
In reality, Medicare does not pay for long-term care. Most seniors will need help with their activities of daily living, so this is a serious financial matter to consider when you are devising your long-term plan for aging.
Long-Term Care Costs
Long-term care expenses loom large, because these costs could be accurately described as exorbitant. Genworth Financial has been conducting an ongoing survey into the state of long-term care costs across the United States. The figures for 2015 are in, and they paint a rather grim picture.
We practice law in the state of Indiana, and the costs in our state are lower than they are in some states, but they are still quite significant. According to the Genworth survey, the median annual charge for a private room in a nursing home in Indiana is $91,250. You get a bit of a break if you are willing to stay in a semi-private room, but you are still looking at a big number. The median annual charge for this type of room is $78,475 at the present time.
These current numbers are attention-getting, but if you are looking ahead toward the future, you should be aware of the fact that the costs have been rising year-by-year. Genworth predicts a four percent per year increase in the state of Indiana over the next five years.
Potential Solutions
As you can see, long-term care is very expensive, and 70 percent of seniors citizens will someday need living assistance. Medicare will not help, but there are solutions that can be implemented if you act in advance.
Medicaid is a government health insurance program that does pay for long-term care. Though it is only available to people with financial need, most people in nursing homes are enrolled in the program.
You will probably need care at the end of your life if you ever need it, so you could give assets to your loved ones before you apply for Medicaid coverage. Many people do go this route, and this is why some seniors who were never poor ultimately qualify for Medicaid.
This takes careful and informed planning, because the program rules are complex. If you would like to discuss the details with a licensed professional, contact us through this page to request a free consultation: Indianapolis IN Elder Law Attorneys.
Paul A. Kraft, Estate Planning Attorney
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.
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