Life Change: Long Term Care Events

For many people entering their later years, even if they have a well-funded retirement, their largest risk is the threat of incapacitation or long term nursing home stay. These costs can vary by state, but long term care facilities are never cheap. Whether you are assisting aging parents, or you are concerned about your own retirement sustainability, these are time sensitive conversations that need to take place.

Understanding Your Options

Long-term care insurance. A policy can pay for care at home, in assisted living or in a nursing home. Premiums are based on your age and health when you apply, so waiting can make coverage more expensive or unavailable. Some life insurance policies also offer long-term care benefits, and we compare both approaches.

Government benefits. Many families assume Medicare will pay for long-term care. In general it does not. Medicare covers only limited short-term skilled nursing care after a qualifying hospital stay, not ongoing custodial care. Medicaid can pay for long-term care, but only for people who meet strict income and asset limits.

Spend-down thresholds. Qualifying for Medicaid often means spending assets down to the program’s limits. Gifts and other transfers made within five years before applying can delay eligibility, so this planning has to start well before care is needed. We work with elder law attorneys when legal structures are involved.

Self-insurance. If your assets and income are large enough, you may decide to set money aside and pay for care yourself. We model how long your savings would last under different care scenarios so the decision is based on numbers, not guesswork.

Helping an Aging Parent

If you are helping a parent, start with the documents: financial and health care powers of attorney, a list of accounts and policies, and the names of their attorney and doctors. Having those in place before a health event makes every later decision easier. If you have a pension lump sum offer, contact us for an independent analysis of your options. For more on protecting assets and income, see our risk management and insurance page.

Does Medicare pay for long-term care?

Generally no. Medicare covers limited short-term skilled nursing care after a qualifying hospital stay. It does not pay for ongoing custodial care such as help with bathing, dressing or eating, which is what most long-term care involves.

What is the Medicaid look-back period?

When you apply for Medicaid long-term care benefits, transfers of assets made in the five years before the application are reviewed. Gifts made during that period can delay eligibility, which is why planning needs to start early.

When should I look at long-term care insurance?

Premiums are based on your age and health when you apply, and a health change can make coverage unavailable. Many people review their options in their 50s or early 60s, as part of their retirement plan.

Can you help me plan for a parent's care?

Yes. We help families organize documents and accounts, compare ways to pay for care and coordinate with elder law attorneys when legal planning is needed.

Read more about the rules in Medicaid Planning: Transfers, Annuities and Your Home.