The one thing we can all agree on is the importance of good health. It’s often taken for granted when we’re younger, but as we age it becomes ever more top of mind.
So the question becomes, how do we pay for it, particularly as we enter our “Golden Years?” The years we’re more vulnerable to serious injury and illness.
Insurance premiums, copays, necessary medicines, professional home care, a seemingly never ending array of expenses. Long term convalescence in rehab facilities, an assisted living facility or a nursing home may also be in our future. Good health can be very expensive
This article will attempt to provide an overview of the many possibilities available to overcome the cost challenges, both for those who have the ability to self pay and those who may need financial help.
First, interest earnings from bank certificates of deposit (CD’s) and bonds, specifically U.S. treasury and high quality corporate bonds. Not much explanation required here as CD’s and bonds are pretty basic savings and income generating vehicles.
*Dividends: Generally regular payouts from stocks, mutual funds, and exchange traded funds.
*Insurance, Long Term Care (Traditional) A form of LTCI that’s been around for a long time. This type of insurance usually requires monthly or annual premium payments. Benefits are paid upon receipt of a claim or claims. One must enjoy current good health to qualify.
*Insurance, Hybrid: A relatively new form of whole life insurance with a long term care Rider attached. If long term care is needed the rider kicks in and pays benefits to the recipient.
*Annuities, Simple Fixed: A Simple Fixed annuity is just what the terms imply. An account held by an insurance company that pays interest based on the terms of the annuity.
Annuity, Hybrid: A relatively new type of annuity with a long term care Rider attached. If long term care is needed the Rider kicks in and pays benefits to the recipient. Much like the hybrid life insurance policy profiled above but with no life insurance attached, so there is no life insurance premium cost.
Note: Many of the insurance/annuity policies profiled above may also pay benefits for care received at home.
*Reverse Mortgage: A reverse mortgage enables you to convert a portion of the equity in your home into a lump sum or regular income for your use, for any need or objective you may have. You continue to reside in your home and do not have to pay back the loan unless you vacate or sell the home. Under current rules you must be age 62 or older to take out a reverse mortgage.
*Subscription Service: (Not insurance). An individual makes monthly or annual payments to a company offering such programs. Each plan purchases a specific number of hours of in home care when the need arises. The service is provided by a network of qualified home care providers, with the option of choosing a friend or neighbor to administer care.
Note: The “right” plan for each individual is dependent on a number of factors including but not limited to affordability, specific needs etc.
Programs providing benefits for those who qualify.
*Medicaid, Long Term Care: Medicaid paid long term care is a joint state and federal program designed to assist those without sufficient assets and income to pay the expenses of long term care. It is the largest public payer of long term care services.
*PACE: (Programs of All-Inclusive Care for the Elderly). PACE is a Medicare and Medicaid funded program that helps people meet their health care needs in the community instead of going to a nursing home or other care facility. An individual must meet specific qualifications, e.g. age 55+, live in the service area of a PACE organization, and be eligible for nursing home care.
*Veterans: Veterans may qualify for nursing and medical care, including personal home care, nursing homes, assisted living facilities, and adult day care. The VA may make partial payments for care based on income and service connected disability.
For more see: National Council on Aging Benefits.gov
The above is meant to be an overview only. Individual situations and needs differ so each program must be evaluated on its own merits and specific application. More information may be acquired by contacting me, or any company or entity that provides the above services and products.
Disclaimer: Nothing herein is intended as a specific recommendation(s) or advice.