The Importance of Having a Plan for Care
Having a plan for care is a key part of retirement planning because it can protect your savings, your spouse and your children. It can also make your family aware of your wishes if there would come a time when you need care.
Did You Know?
A person’s ability to perform ADLs can be affected by many things; among them is the progression of chronic illnesses.3 Aging is one of the main triggers of a wide range of chronic diseases.4 As you get older, the risk of developing a chronic illness and needing long-term assistance as a result, also increases.
The Cost of Care
The cost of such extended assistance depends on the type and duration of care you need, the provider you use, and where you live.
At the lower end of the spectrum, the average daily cost of a non-medical home care across the U.S is $128 – $224/day and $128 – $240/day for a medical home health aide. 5 At the higher end of the spectrum, the average daily costs of a shared room in a U.S. nursing home is $150 — $1,000/day.6 The cost is even higher for a private room in a nursing home facility.
Who Pays for Care?
The issue of paying for care can be confusing. Some individuals assume that Medicare or Medicaid will cover the costs, but you should consider additional options too, including life insurance and annuities.7
The Limitations of Medicare and Medicaid
Medicare does not pay for non-skilled assistance with the Activities of Daily Living. It only covers the costs associated with skilled care services or rehabilitative care:
Medicaid has specific criteria for covered care services, but more importantly, Medicaid has income and asset limits, and determines eligibility with a five-year look-back at your financials. It may not be a viable consideration for every person.9
As you can imagine, without a plan in place, these expenses could unexpectedly deplete your savings or emergency funds. Moreover, they could become a burden to your loved ones who are likely to have their own financial concerns. And, if by chance, you and your spouse need care at the same time, then the effects are two-fold.
The bottom line is, it’s smart to have a game plan so that you can look forward to your future. Feel confident knowing that unexpected issues will not hamper your loved ones and that they will know what your wishes are, if the time ever comes that you cannot adequately speak for yourself.
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1 The Wall Street Journal, “The Odds on Needing Long-Term Care,” June 6, 2019.
2 Centers for Disease Control and Prevention - https://www.cdc.gov/ncbddd/disabilityandhealth/infographic-disability-impacts-all.html
3 Cleveland Clinic, “Lifestyle Choices: Root Causes of Chronic Diseases,” https://my.clevelandclinic.org/health/transcripts/1444_lifestyle-choices-root-causes-of-chronic-diseases.
4 News Medical Life Sciences, “Aging can be a biggest risk factor for wide range of chronic diseases,” https://www.news-medical.net/news/20191218/Aging-can-be-a-biggest-risk-factor-for-wide-range-of-chronic-diseases.aspx.
6 American Council for Aging, “Nursing Home Care Costs by State and Region–2019.”
7 Sagicor does not issue or offer long-term care insurance.
8 LongTermCare.gov, “Who Pays for Long-Term Care?,” https://longtermcare.acl.gov/the-basics/who-pays-for-long-term-care.html.
9 AgingCare, “Qualifying for Medicaid to Pay for Long-Term Care,” https://www.agingcare.com/articles/medicaid-and-long-term-care-133719.htm.
Sagicor Life Insurance Company, home office Scottsdale, Arizona issues life insurance and annuities . Products not available in all states and state variations may apply. Products have limitations and restrictions including surrender charges.
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