subject: Retirement Planning and Long Term Care [print this page] Retirement Planning and Long Term Care Retirement Planning and Long Term Care
Retirement planning is not about making ends meet, it is about preparing your resources and spending your money wisely to maintain independence during your golden years. The biggest concern when it comes to retirement planning is long term care. Long term care offers wide range of services from personal to medical care for seniors and people with disability.
The Department of Health and Human Services announced that 40 percent of Americans age 65 and older have the strong possibility of staying in nursing home in the future. The America's Health Insurance Plans revealed that 55 percent of Americans older than 85 and are seriously impaired will surely need long term care. The majority of these seniors with long term care needs prefer to receive care in the comfort of their own home, and very few elders wish to enter nursing homes or other facilities. What make Americans skeptical about long term care planning is the exorbitant long term care costs by state that could almost sweep off their retirement savings and resources. This cost rises every year in pace with inflation. In 2006, the yearly rate for private room in nursing homes costs $75,190, which is 7.3 percent hike since 2004, and climbed up to $85,585 or $219 a day in 2010 according to Met Life Mature Market Institute. Meanwhile, assisted living facilities had annual cost of $35,616 in 2006, or 17.6 percent increase since 200439, while $39,516 annual cost in 2010. Those rates exclude special care for dementia patients.
Moreover, life and health insurance do not cover long term care services so people feel the pressure of getting expensive LTC insurance. Health insurance does not necessarily pay services for personal and skilled care, and often provides short term coverage. Long term care insurance, otherwise, is designed to help people buy either medical or non medical services and to maintain their dignified life despite of cognitive impairment or disability.
The dearth in stable government health care program worsens the long term care problem in the country. Medicare and Medicaid mislead people that both programs are used to pay for LTC services for free or at much lower rate. The two, otherwise, are intended to provide support for the impoverished Americans, but the assistance is usually short and limited. For instance, Medicare will pay the medical cost if you broke your leg or arm, but it excludes personal care such as bathing, eating, and dressing that are usually needed by seniors and the disabled. Medicare will pay for very limited time, usually 20 days, but can be extended through Medicare supplement. Medicaid qualifies those who are earning below poverty level or the underprivileged. Beneficiaries must have less than $2,000 in total assets to qualify for benefits; so if you are earning more than the required maximum value, you have to deplete your assets first before qualifying for benefits. Middle income earners and the high income earners are not advised to apply for Medicaid benefits because they will be forced to surrender their assets and income.
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