Exploring Long-Term Care Options
Exploring Long-Term Care Options
Nearly 7 out of 10 people will need long-term care services in their lifetime. That probability, combined with the significant costs of long-term care, underscores the importance of advance planning.
Proactive planning allows you to explore your financial options and the potential impact of each on your long-term financial plan. A long-term care plan can provide you and loved ones peace of mind about the future.
The first step in planning is to familiarize yourself with these basics about the types of care, average costs, and ways to pay for it.
Types of Long-Term Care
Home Care – 65% of individuals needing long-term care receive it in the comfort of their own homes. At-home services often include personal care, meal preparation, and medication management over a few hours a week to full-time care.
Adult Day Care – supervised daytime care can provide assistance with daily living tasks, health monitoring, meals, socialization, and recreational activities.
Assisted Living – 13% of those needing care receive it in these residential facilities that provide some assistance with daily tasks. Services may include assistance with bathing, dressing, medication management, and meal preparation.
Nursing Homes – 35% of individuals receiving long-term care need 24-hour skilled nursing care for complex medical needs or disabilities. On average, individuals require nursing home care for one year.
Continuing Care Retirement Communities – CCRCs offer a continuum of care that includes independent living, assisted living, and nursing care, allowing residents to transition between levels of care as their needs change. Residents typically pay an entrance fee and monthly fees, which cover housing, amenities, and access to on-site medical care and support services.
2024 Median Cost of Care for Portland, Maine Area
| Type of Care | 2024 Annual Median Cost |
| Homemaker Services | $76,579 |
| Home Health Aide | $80,005 |
| Adult Day Care | $34,093 |
| Assisted Living | $85,561 |
| Nursing Home | Semi-private room $148,190 Private room $161,931 |
Ways to Pay for Care
Medicare provides little coverage for long-term care services. Part A pays the first 20 days in a skilled nursing facility, then you may or may not pay the next 80 days depending on your supplemental policy. After 100 days, the entire cost is on you.
The other options are personal savings, private insurance, and state Medicaid programs.
Relying on personal assets or investments to pay for care, or self-funding, involves a certain level of risk. If the cost is substantial or you require care for many years, you may quickly deplete retirement savings, jeopardizing your long-term financial security or forcing the burden of care on loved ones. You may also be limited to care options you can afford instead of what you prefer.
Private insurance now comes in many flavors, making it a more viable solution for many. But like other types of insurance, you may never use it and the benefits may only cover some of the costs. Additionally, your age and health may make you uninsurable.
Medicaid requires recipients to spend down their assets to a certain level in order to receive care. The amounts vary based on whether you’re single, married, and whether both spouses are applying for Medicaid. In Maine, 2024 asset limits vary from $10,000 to $154,140.
However, some states, including Maine, offer long-term care partnership programs. The programs increase your Medicaid asset limit based on the amount of benefits received from your long-term care insurance. For example, if the asset limit is $10,000, but your insurance policy pays out $300,000 in benefits, you can keep $310,000 of assets and still qualify for Medicaid.
Conclusion
Choosing the right long-term care option is a complex decision that requires careful consideration of many factors. Fortunately, you don’t have to navigate long-term care alone. Your PFA advisor can help you assess whether using personal savings or insurance is better for your situation. They can also connect you with an experienced insurance agent who specializes in long-term care for quotes and guidance. The end goal is to help you make informed decisions that align with your needs, preferences, and long-term financial situation.
Learn More
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