What are my options for financing long term care?

Question: I’m trying to help my mom plan the next steps for my 86-year-old dad. What are the financing options for long-term care? She’s so afraid they’ll be turned down by Medicaid that she hasn’t even started the application yet. I hope to let him know that there are options.

Answer: It’s great that you’re helping your parents with this. Long-term care is a very common need. More than two-thirds of today’s seniors can expect to need long-term care. The costs can be daunting, especially for seniors with significant needs such as memory care and/or mobility issues. Here are some avenues to explore to help fund them:

  1. Check to see if your father’s life insurance policy includes a rider for long-term insurance. A long-term care rider allows the policyholder to access a portion of the benefits to help with the costs of long-term care. Just be aware that this option is likely to be expensive. A cheaper option might be to add what’s called an Accelerated Death Benefit (ADB) endorsement to your policy. Be aware that both options come with restrictions and will reduce the policy benefits ultimately paid to beneficiaries.
  2. Speak to an estate planning attorney to learn more about the Medicaid application process. Although Medicaid is a federal benefit, it is administered by the states and each state has its own eligibility requirements. A qualified and experienced attorney – who has worked with seniors in similar situations – can walk you through the process and even file the claim for you. Your father may not be eligible for full benefits because Medicaid asset and income limits are quite low. In this case, you may qualify for partial benefits by establishing and funding a special needs trust.
  3. Check with the Department of Veterans Affairs (VA). If your father is a veteran, he may be eligible for certain long-term care benefits through the VA. Services include home (nursing services), community (including adult day care centers), and residential (assisted living facilities and nursing homes) services for veterans with clinical need . Beneficiaries must be enrolled in VA health care.

The good thing to know is that there are options. Knowing more about them should help your family come up with a plan.

Comments are closed.