Does Medicare Pay for Long-Term Care Costs?

Unfortunately, many people assume that Medi-care will cover any LTC (long-term care) they might need. It is a mistaken belief that nursing home or at-home care will be taken care of.

1. Medicare covers the cost of medical care.

2. To be eligible for Medicaid to pay for long-term care costs, your income (SSI, pension, etc.) and assets must be within federal poverty guidelines: The income cap is about $2,500/month with assets not to exceed $2,000-$4,000.

Paying for long-term care costs:

1. You can use investments, assets, and income to cover these costs.

2. You can use the cash value of permanent life insurance, life insurance with a long-term care rider, or a hybrid annuity. A rider provides a benefit, like long-term care coverage.

3. You can use a reverse mortgage.

More About Paying for Long-term Care Costs

Additional ways to cover in-home care costs and nursing home costs:

· You can use a viatical*or lifetime settlement of existing life insurance.

· You can also use long-term care insurance.

You might need help to figure out long-term costs, especially the further away you estimate you are from incurring them.

· Talk with your financial advisor about planning for long-term care costs based on your age and your assets.

· Talk with your tax professional about long- term care premium deductibility, taxation of benefits, and taxation of a lifetime settlement.

*Viatical is an arrangement whereby a person with a terminal illness sells their life insurance policy to a 3rdparty for less than its mature value, in order to benefit from the proceeds while alive to pay for care, i.e., your $500,000 death benefit life policy is sold for $220,000, giving you immediate cash while alive.