It may feel like you are never really in the mood to plan for your long-term care options. Thinking about a time when you or your loved one is no longer able to care for themselves is not pleasant, but it’s essential that you take some time right now to plan for the future. Without a concrete plan in place, you may find yourself facing an emergency situation where you’ll have to scramble to locate and pay for a long-term care facility. Here are three tips to help you prepare financially for long-term care.
1. Consider Long-Term Care Insurance
While many people assume that long-term care insurance is too costly, there are policies that are more affordable, especially for those who purchase a policy when they are younger. It’s common for people to only start thinking about this insurance when they reach the age of 50 or 60, but couples in their 40s may be able to purchase coverage for under $1,500 per year. The same plan could cost over $2,200 per year if the couple waited until they were 60 to buy it. It’s worth it to start planning for long-term care early, and you may find that doing so allows you to save money in the long run.
2. Look Into Opening a Health Savings Account
If your health insurance plan allows for a health savings account (HSA), this can be used to cover future long-term care costs. An individual can contribute up to $3,550 in 2020 and families can contribute a maximum of $7,100, both of which are tax-deductible. People over the age of 55 are allowed to contribute an extra $1,000 per year into their HSA. These funds in the HSA roll over across the years, and you can withdraw funds tax-free to pay for healthcare costs, including long-term care insurance costs and long-term care expenses.
3. Understand Medicaid’s Role
Some people simply assume that Medicare will step in and pay for their long-term care costs. While it does assist in some ways, such as covering costs associated with nursing home care following a temporary hospitalization, the coverage is limited to 100 days. However, Medicaid is available for low-income individuals who have less than $2,000 in liquid assets. There are several eligibility requirements that you’ll need to meet in order to qualify for Medicaid coverage, and not all long-term care facilities accept Medicaid, so it’s a good idea to to speak to a knowledgeable long-term care planning attorney to discuss your options.
Want to learn more about your long-term care planning options in the Spokane Valley or Eastern Washington area? Call Legacy Law Group today at (509) 315-8087 to get started with a trusted and experienced elder law attorney.
