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M.A. Kluemke and Associates

Understanding Long Term Care

Believe it or not, approximately 70% of Americans who live to the age of retirement will need long-term care services at some point in their lives. Generally, women have longer life expectancies than men and they are more likely to require long-term care. 

The cost of care, which depends on factors such as where you live and the type of care you receive, is expected to dramatically increase in the future. According to the Genworth Cost of Care Survey 2017, the national median cost of a semi-private room in a nursing home facility is $235 per day or $7,050 per month.

So now that you know you could be impacted by long-term care and the cost involved, how do you address it?


To self-insure is to cover the cost yourself — you must have sufficient income to pay the rising costs of long-term care. Keep in mind that even if you have sufficient resources to afford long-term care now, you may not be able to handle rising future costs without drastically altering your lifestyle. 


Medicaid is a joint federal and state program that covers medical bills for the needy. If you qualify, it may help pay for your long-term care costs. In order to qualify, you generally have to have few assets or will need to spend down your assets. State law determines the allowable income and resource limits.

To receive Medicaid assistance, you may have to transfer your assets to meet those limits. This can be tricky, however, because there are tough laws designed to discourage asset transfers for the purpose of qualifying for Medicaid. If you have engaged in any “Medicaid planning,” you may wish to consult an advisor or an Elder Care Attorney to discuss any new Medicaid rules.

Long-term care insurance

A long-term care insurance policy may enable you to transfer a portion of the financial burden of long-term care to an insurance company in exchange for the regular premiums. Long-term care insurance may be used to help pay for skilled care, intermediate care, and custodial care. Most policies pay for nursing home care, and comprehensive policies may also cover home care services and assisted living. Insurance can help protect your family financially from the potentially devastating cost of a long-term disabling medical condition, chronic illness, or cognitive impairment.

Long-term care riders on life insurance

A number of insurance companies have added long-term care riders to their life insurance contracts. Usually for an additional fee, these riders will provide a benefit — normally a percentage of the face value to help cover the cost of long-term care. A common question by consumers when they are considering a traditional long-term care policy is “What happens if I never need to use it and I’ve paid all of those premiums?” This product would pay a benefit at your death or if you needed care.

Counting on your health insurance or Medicare to pay for your care could be a costly mistake. Medicare for instance only pays for skilled care. Skilled care is the treatment of medical conditions such as what you might receive at a hospital. Custodial care will assist people the activities of daily living such as eating, dressing, bathing, using the restroom, and moving from place to place.  This type of care may take place at home, in the community, in an assisted living facility or nursing home.

If you would like to talk with us about how to address long term-care, we would be glad to provide you a customized approach that works for you and your family.  It’s worth investing the time now because it could potentially save you in the long run.    

Any guarantees are subject to the claims-paying ability of the underlying issuer.

By Mark Kluemke

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Check the background of this financial professional on FINRA's BrokerCheck