Planning for long-term care

Long-term care is an important component of financial and personal wellness planning. Planning for long-term-care can help aging individuals maintain their independence and quality of life into their golden years.

According to the National Institute on Aging, long-term care (LTC) involves a variety of services that accommodate a person's health or personal care needs when they can no longer perform everyday tasks on their own. LTC can help people with chronic illnesses, disabilities or other conditions. LTC can be expensive, but planning for such needs can help families avoid financial strain and stress, and also provide peace of mind.

Types of care

One of the initial steps when planning for LTC is to identify the available options. LTC is multi-faceted and can come in a variety of forms. LTC can involve in-home care, with a care provider coming into an individual's home to offer services like housekeeping and assistance with personal care. In addition, LTC can take place in nursing homes or assisted living facilities. Adult daycare facilities also may be considered part of LTC.

Payment options

It's important that families recognize that traditional health insurance does not cover the costs associated with LTC. In addition, Medicare cannot be used for LTC in most cases in the United States. It is essential to earmark funds or find alternatives to cover these costs.

According to Medicare.gov, some insurance companies will enable people to use life insurance policies to pay for LTC. Long-term care insurance also merits consideration. This insurance may cover LTC facilities or even home care and medical equipment. Families can explore all their options and find a policy that aligns with their needs and budgets.

Additional financial tools to consider are a Health Savings Account (HSA) or a Flexible Spending Account (FSA), which allow for tax-advantaged savings specifically for health care expenses. Those with limited income can be eligible for Medicaid in the U.S., which can pay for nursing home care. However, it is important to research which homes accept Medicaid as a form of payment.

Further estate planning

People can work with licensed professionals to solidify long-term care and financial plans. An estate attorney can help create a durable power of attorney and a living will to ensure that health care and financial decisions are managed according to a person's wishes if he or she becomes unable to do so. An irrevocable trust also could be beneficial in managing assets and potentially shielding families from LTC costs.

Families should discuss health care wishes and other financial plans as they pertain to long-term care. Early planning can help families navigate caring for aging individuals.