Alternatives to Long Term Care Insurance

Long-term care insurance can be one of the most expensive types of insurance available on the market today. This relatively new coverage is meant to cover the costs of a nursing home or assisted living facility if such care becomes necessary.  However, the high cost of this coverage has caused many people to look for other ways to pay for a nursing home if it becomes necessary.

The most common alternative to long-term care insurance is paying for this care out of pocket. In other words, instead of buying insurance, an individual or couple could simply accumulate enough assets to pay for this type of care themselves. Of course, this does mean saving a lot of money and assets. Average costs for a nursing home can be in excess of $10,000 a month in some areas of the country.  This means for every year of care, an individual or couple would need to save up at least $120,000. While a few people can cover this with cash on hand, many others expect to sell their largest asset, their home, in order to pay for this care.

Another alternative to long-term care insurance is to be covered under a state aid program such as Medicaid. While the exact rules on who can qualify for Medicaid vary from state to state, in general it is necessary for a senior to have virtually no assets or income in order to be covered. In some cases, any money made beyond Social Security will disqualify someone. In most states, having assets in excess of $2,000 can also disqualify someone. Nonetheless, there are ways to spend down assets before entering a nursing home in order to have the state pick up the tab.  This can be a viable option for seniors who are not starting with a lot of assets that could be used to pay for long-term care.

A third option for some people is to arrange at-home care. While being cared for at home can be cheaper than being cared for in a nursing home, many arrangements must be made in order for in home care to work. In anticipation of this, many seniors should start by redesigning their residence to accommodate medical equipment such as wheelchairs. Ideally, make these improvements before health care problems begin. Next, be sure to research care options such as visiting nurses before becoming sick. Finally, be sure to document your choices in writing. Keep in mind that depending on the health circumstances, it may still be necessary to move to an assisted living facility.