Do you have a plan in place for long-term care? If you or a loved one should have to live in an assisted-living home or a nursing home, how will you pay for it? It’s important to think things through in advance so you don’t need to explore your options during a crisis.


Care Is Expensive


In order to plan realistically for long-term care, you must first understand how expensive it is.  According to Forbes, costs for assisted living and nursing home facilities are on the rise. In 2017, the median monthly cost for nursing home care was about $8,000, and annual costs come out at $97,455. For a semi-private room, you can expect to pay around $85,775 annually. 


What About Medicare?


Medicare is an important resource for many seniors. However, as Marketwatch points out, there are limits on the coverage provided when it comes to nursing home or assisted living care. After a three-day stay in the hospital, you can expect for Medicare to cover up to 90 days of care in a skilled nursing facility. If you deplete your assets paying for care, Medicaid pitches in. With that in mind, many people need to find ways to cover expenses Medicare won’t cover.   


Weigh Your Options


For those who require alternative solutions, the good news is there are options. Here are some ideas for paying long-term care expenses.


Long-term Care Insurance


Long-term care insurance policies vary in what they cover. In response to market demand, some experts note many providers have expanded coverage in recent years. In addition to covering stays in long-term care facilities, some plans cover informal care at home, lifetime benefits, coverage outside the US, and some offer elimination of waiting periods for benefit payout. Some plans offer inflation options to match rising costs as well; it’s important to understand unless you prepay your policy in a lump sum upfront, rates are not guaranteed on premiums so an inflation match could help under some circumstances. 


Supplemental Insurance


Supplemental Medicare Advantage plans can help seniors with various expenses associated with long-term care; examples of expenses some policies cover include health, dental, vision, hearing, prescriptions, and wellness programs. All Medicare Advantage plans offer at least the same benefits as original Medicare.


Hybrid Life and Long-Term Care Insurance

These insurance policies are a combination of life insurance with a “living” long-term care rider. When you use these policies for long-term care, you dip into the death benefit in advance. Some policies allow you to extend long-term care benefits. Most plans cover in-home custodial care, such as from family members. You can usually receive benefits from one to seven years, and most plans allow refunds up to 100 percent of paid premiums. 




If you plan to pay out-of-pocket for care, it’s important to carefully evaluate your assets. Some people can pay for care with cash. Liquidating assets is an option for those with stocks, vacation properties, extra vehicles, and such. Have a realistic idea of how much your assets are worth, and consider any growth or depreciation those assets might experience. You also need to decide how much you want to remain in your estate for family members, as well as how easy it is to access your assets. There are tax implications when you liquidate certain assets as well. Lastly, some people can rely on family members to cover long-term care costs. It’s often advisable to discuss your situation with an elder care attorney or financial planning professional. 


Long-term care can be a costly proposition. Have a plan in place should you or a loved one need to live in an assisted living or nursing home facility. You can avoid a financial crisis later by examining your situation now.