It’s easy to get confused about what types of LTC costs Medicare will pay for because it’s, well…confusing. And knowing what to expect from Medicare down the road will keep your best laid financial plan from being derailed with a costly health event.
In a nutshell, there is “skilled care” and “custodial care”. Skilled care is medical care provided by trained personnel (i.e. doctors, nurses, physical therapists, etc.) and IS covered by Medicare. Custodial care is the support needed to help you with non-medical Activities for Daily Living (eating, bathing, dressing, toileting, mobility and continence) and is generally NOT covered by Medicare.
The need for custodial care can come from cognitive impairment and/or general physical decline that is part of the normal aging process. I haven’t met a retiree yet who says they don’t want to stay in their home as long as possible. To make that happen, custodial care can become necessary, and it’s not cheap. According to the 2022 Genworth Cost of Care survey, in Knoxville TN the average home health aide is $27/hour. Once you reach 40 hours/week of home care, you’re up to a whopping $4,500/month.
If there’s been no proactive financial planning, the extra care may fall to a family member to help fill the gap. Unfortunately, the reality of that situation isn’t ideal – your spouse may not have the physical strength to help you move around, no matter how good their intentions are. And most adult children are juggling full-time jobs and kids and, to be honest, they really don’t need the stress of being your caretaker too.
What your spouse or your adult child DOES need though, is to be in the position of being your care coordinator. You can elevate them from caretaker to care coordinator by making sure you have a financial strategy in place so you can afford to have someone come into your home and help you.
There are great solutions that can give you tax-free dollars to cover custodial care costs, or provide a death benefit for your heirs if you never use it. It’s never too late to make a plan. If you’re married, have you thought through both spouses’ lifetimes? If the first spouse needs expensive care, then the surviving spouse is left with diminished resources, the loss of a Social Security check, and higher taxes as a single filer. Do you have enough assets for both of you? If you’re single, it’s paramount you have a plan in place that protects your financial independence for your lifetime.
Call, email or contact me on our website if you’d like to learn more. Your family will thank you!
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