Paying for long-term care expenses. Know your options.
An important part of planning for long-term care is understanding how to pay for services. This is because long-term care is very expensive and, contrary to what many people believe, Medicare will not pay for most long-term care services.
Consequently, if you are one of the 70% of people over the age of 65 who will need long-term care services, there's a very good chance you will have to pay for some or all of your long-term care services out of your personal income and resources.
Public options: Medicare, Medicaid and long-term care
Very few government programs will help pay your long-term care expenses. Those that do have strict eligibility requirements and limits on what is covered. And even though Medicaid is the major payer of long-term care services, most people won't qualify. As a result, you shouldn't depend on Medicare or Medicaid to pay for your long-term care expenses.
Public options: Medicare and Medicaid
Make sure you understand what Medicare and Medicaid will—and won't—pay for when it comes to long-term care services.
Private pay: Paying for long-term care with your personal finances
It's difficult to predict if you'll need long-term care. And if you do need care, knowing how much you'll need, what it will cost, and whether family or friends will provide some of the care can be hard.
However, it's reasonably easy to predict that if you need extensive long-term care services—over a long period of time—you will have to pay for some or all of it out of your personal finances. That's why an increasing number of people are using private financing options to help pay for long-term care.
Which financing option is best for you depends on many factors, including age, health status, your risk of needing long-term care, and your personal financial situation. Review the following charts to see how your health and age may affect which long-term care financing options you should consider.
| Relatively Good Health | Poor Health or Terminally Ill | Health Considerations are Not Important |
|---|---|---|
| Long-Term Care Insurance | Accelerated Death Benefits | Annuities |
| Continuing Care Retirement Communities | Viatical Settlements | Home Equity |
| Trusts | ||
| Life Settlement |
| Better Option for Younger Person | Better Option for Older Person |
|---|---|
| Long-Term Care Insurance | Deferred Annuities |
| Personal Income and Savings | Sell Home |
| Home Equity Conversion | |
| Charitable Remainder Trust | |
| Life Settlement | |
| Continuing Care Retirement Community |
Personal income and savings
Can you pay for long-term care all on your own? Find out.
Long-term care insurance
With long-term care insurance, you can be certain much of your long-term care expenses are covered. Learn more.
Home equity
There are several ways you can leverage your home's equity to help pay for long-term care. See how.
Life insurance
Your life insurance could help pay for long-term care. Find out how.
Annuity contracts
Annuities are another way you can help cover long-term care costs. Learn more.
Trusts
There are two types of trusts that may help pay for long-term care. Find out how.
