[…] My guess is that over the next decade or so, we’re going to see discussions about long term care that will look similar to what we’ve seen in the last couple years regarding health insurance. The rate hikes we saw last year in the long term care insurance industry were a sign that long term care is becoming more expensive than ever, and as the population ages, there will be a steadily increasing demand for long term care services. Other nations are starting to address the subject in their legislative bodies, and although the US tends to prefer private market solutions, it remains to be seen whether government programs like CLASS will become more widespread and robust as time goes by.
[…] The possible instability in Medicaid only serves to highlight the importance of coming up with a strategy – preferably while still young and working – to pay for future long term care services. Whether or not Medicaid will still be able to provide its current level of benefits 20 years from now is unknown. It’s more important than ever to start saving now, plan for the purchase of long term care insurance, or figure out some other way of covering potential future long term care costs.
There is quite a bit of misunderstanding around financial planning for long term care. Some of that has to do with confusion over the differences between Medicare and Medicaid, and what those programs will actually cover when it come to long term care. There is also some confusion around what is meant by long term care.
Medicare is a federal program designed to cover the cost of health care for elderly Americans as well as those with disabilities. Medicaid is a joint state and federal health care program, but it provides […]
[…] But the downside is that you have to be able to accumulate a large amount of cash in order to shield yourself against financial devastation if you do end up needing significant long term care. 63% of workers over the age of 55 have less than $100,000 in retirement savings, so adding the need to save an additional large sum of money specifically designated for long term care needs might not be realistic for most people. […]