Life is Full of Surprises.
Paying for long term care shouldn't be one of them.
Nearly two-thirds of American nursing home residents have their care paid for by Medicaid and, in exchange, all Social Security, pension and other income is rerouted to go toward their bill. The personal needs allowance is meant to pay for anything not provided by the home, from a phone to clothes to a birthday present for a grandchild. Medicaid was created in 1965 and a 1972 amendment established the personal needs allowance, set at a minimum of $25 each month. Had it been linked to inflation, it would be about $180 today. But regular cost-of-living increases were not built into the allowance and Congress has raised the minimum rate only once, to $30, in 1987. It has remained there ever since.1
Women are more likely to need long-term care. Thus, some couples look to insure just the greater risk. However, this approach can create different problems that fall on the hands of the loved ones. Regardless of which one is not covered, the risk of needing care and the subsequent physical, emotional, and financial burdens that follow will negatively impact the healthy spouses standard of living and quality of life.
Without a long-term care insurance plan, you are essentially “self-insuring” your risk of paying for care. That means you are at the mercy of your State and its Laws towards Medicaid.
1 Associated Press March 15, 2023.
Guarantees are based on the claims paying ability of the issuing company. If you need more information or would like personal advice you should consult an insurance professional. You may also visit your state’s insurance department for more information.