Paying for long-term care

Long-term care can be expensive — and, typically, it's an out-of-pocket expense.

Medicare, a federal program for people older than 65 and those who have certain disabilities, doesn't generally pay for long-term care. Medicaid, a joint state-federal program designed for people who meet certain income requirements, might be an option for adults who have limited assets or those who've nearly depleted their assets. However, who's eligible for Medicaid and which services are covered varies by state.

If you don't expect personal savings to cover the cost of long-term care, you might be able to finance long-term care through long-term care insurance. In exchange for monthly premiums, long-term care insurance covers nursing home care or other long-term care services.

Premiums generally increase with the person's age, and coverage benefits vary significantly. If you're considering long-term care insurance, make sure the policy covers any pre-existing conditions as well as conditions that could develop later, such as dementia. Also check whether you can reduce coverage if the premiums become too expensive.

Other options might include a reverse mortgage — in which you convert part of the equity in your home into cash — or the sale of a life insurance policy for the present value of the policy (life settlement).

Be wary of risks and fees, however. Discuss the options with a lawyer or accountant. You might also contact a social worker or the local agency on aging.

Discussing long-term care with a loved one

If you're researching long-term care options for a parent or other loved one, include your loved one in the process as much as possible. Consider these tips:

  • Plan ahead. Don't wait until a loved one needs a long-term care facility. Start planning early so that you have time to evaluate the options together.
  • Work long-term care into everyday conversation. If your mother mentions a problem turning on the faucet, for example, you might ask whether she could use help bathing or managing other aspects of personal care.
  • Listen to your loved one's preferences and concerns. If your loved one is mentally competent, recognize his or her right to make decisions about long-term care. Stay positive as you remind your loved one that his or her safety is your primary concern.
  • Explain the need for care. Let your loved one know why you feel he or she needs long-term care. Is 24-hour safety a concern? Is it difficult to transfer your loved one from home to medical care? These issues can help guide your conversation, and help your loved one understand why you feel long-term care is necessary.
  • Involve others. If your loved one doesn't respond well to your efforts to talk about long-term care, involving trusted contacts — such as other loved ones, clergy, a doctor or an attorney — might help.

The idea of leaving home or receiving in-home help for everyday activities can be distressing. The more you know about the options, the better choices you can make.

March 20, 2015 See more In-depth