The Rising Costs of Long-Term Medical Care
Have you ever wondered what would happen to you if you were to suffer a debilitating injury or a medical condition that might require long term care? As unpleasant as it might be to think about, it is a possibility you should plan for.
By 2030, approximately 24 million people in the US could require some form of long-term care. The cost of long-term care, on the other hand, keeps rising to unaffordable levels. A survey conducted by Genworth in 2019 revealed that the annual cost of a private room in a long-term care facility can be as much as $100,000. Home health aide and homemaker services can be just as expensive – costing up to $50,000 per year.
Reasons behind the Rising Costs of Long-Term Care
Many reasons can be attributed towards the skyrocketing costs of long-term care in the country. The shortage of skilled and trained caregivers is said to be among the main reasons. Experts say that the long-term care industry is understaffed and might not be able to meet the rising demand for high-quality home care and assisted living care services.
The rapidly growing population of older adults in the country – currently estimated at 55 million – has also resulted in a massive increase in demand for long-term care. Data shows that every day, 10,000 people in the US turn 65. Among these, at least 7 out of 10 might require long-term care.
Moreover, an increasingly large number of older adults in the country have at least one chronic condition and the level, quality, and complexity of care required for these people has also increased substantially in the recent past. As a result, the cost of long-term care services across the country has become prohibitively expensive.
With this being the case, it is important for you to include long-term care planning into your estate plan. How do you do that? Let us take a look.
Steps to Take for Long-Term Care Planning
Long-Term Care Insurance
Long-term care insurance policies are designed to cover the expenses associated with your care (at home or at a facility). The policy will kick in if you become physically or mentally impaired and are not able to perform what are called activities of daily living, which include bathing, toileting, dressing, eating, and moving around on your own.
Ideally, you should buy long-term care insurance between the ages of 45 and 55. The older you get, the higher your premiums will be.
Life Insurance and Annuities with Long-Term Care Riders
If you cannot afford to buy long-term care insurance, you can choose to buy life insurance with long-term care riders. Similarly, annuities with long-term care riders are also a good choice for those who cannot afford long-term care insurance.
With deferred annuities, you can invest a sum of money upfront and receive monthly payments once you reach a certain age. While these are not specifically designed for long-term care, they can provide you with monthly payments which can help you cover the costs associated with your care – or any other expense for that matter.
Medi-Cal can be a good option for those who cannot afford privately paid care. While you cannot expect to receive the same level of care that you might receive at a private nursing home, Medi-Cal can provide you with the basic level of care – as deemed necessary by a physician.
The Medi-Cal program has strict eligibility criteria which you need to meet in order to be able to receive the benefits. An experienced estate planning attorney might be able to help you qualify for Medi-Cal without exhausting your life savings.
Trust Planning and Advance Healthcare Directives
If you have a substantial amount of assets, you can put them into a trust and make sure they are managed in such a way that you can get the funds you need for your long-term care in the future. In addition to that, creating an advance healthcare directive might also be necessary, as you need to make sure someone you trust can make healthcare decisions on your behalf in case you are unable to do so due to physical or mental incapacity.
Need to Plan for Your Long-Term Care? Our California Estate Planning Attorneys Can Help You!
The costs of long-term care can be unexpectedly high – especially if you become severely impaired as a result of a disease or chronic condition. So, it is important to plan ahead and make sure you have the resources you need to meet the costs associated with your care.
The estate planning attorneys at Garmo & Garmo have several decades of experience helping people with their estate planning and long-term care needs. We can create a comprehensive estate plan that takes your long-term care as well as other needs into account and update it as and when needed.
To find out how we can help you with your long-term care planning, call us today at 619-441-2500 or contact us online and schedule a free consultation.