Insights + Resources

Extended Care. How Much Do You Know?

Sep 14, 2020

Elder Care Tree
Separating some eldercare facts from extended care myths

How much does extended care cost, and how do you arrange it when it is needed? The average person might have difficulty answering those two questions, for the answers are not widely known. For clarification, here are some facts to dispel some myths.

True or false: Medicare will pay for your mom or dad’s nursing home care.

FALSE. Medicare is not extended care insurance.1

Medicare Part A will pay the bill for up to 20 days of skilled nursing facility (SNF) care, but after that, you or your parents may have to cover some costs out-of-pocket. After 100 days in a SNF, you will have to cover all costs out of pocket. The only way to “reset the clock” for Medicare coverage of these services is if the patient can somehow go without skilled nursing care for 30 or 60 days or if they require a hospital stay of three full days or longer.1

True or false: A semi-private room in a skilled nursing facility costs about $35,000 a year.

FALSE. The median cost of a semi-private room is now $89,297. A private room in an assisted living facility has a median annual cost of $100,375 annually. A home health aide could run you up to $4385 per month for full-time care. Even if you just need someone to help mom or dad with activities of daily living (ADLs), such as eating, bathing, or getting dressed, the median hourly expense is not cheap: non-medical home aides run about $23 per hour, which at 10 hours a week, means nearly $12,000 a year.2,3

True or false: Only around 40% of Americans aged 65 and older are expected to need extended care.

FALSE. Someone turning 65 today has a 70% chance of needing extended care. That means that by 2030, it’s estimated that around 24 million Americans will need extended care.  This is double the current number already receiving care.4,5

True or false: The earlier you buy extended care insurance, the more manageable the premiums.

TRUE. Younger policyholders may pay lower premiums.

The best time to consider extended care insurance is when you are healthy. While you may be paying a premium for a longer amount of time, the expense may pale in comparison to paying for unexpected medical costs out of pocket.6

True or false: Medicaid can pay nursing home costs.

TRUE. The question is, do you really want that to happen? While Medicaid rules vary by state, in most instances, a person may only qualify for Medicaid if they have no more than $2,000 in “countable” assets ($3,000 for a couple). A homeowner can even be disqualified from Medicaid for having too much home equity. A primary residence, a primary motor vehicle, personal property, and household items, burial funds of less than $1,500, and tiny life insurance policies (with face values of less than $1,500) are not countable. So, yes, under these economic circumstances, Medicaid may end up paying extended care expenses.7

A little strategizing now could make a big difference in the years to come. Call or email an insurance professional at Epic Capital today to learn more about ways to pay for extended care and discuss your choices. You may need to find a way to address this concern.

Tags: , , , ,

More Insights

Feb 26, 2021

As a parent, of course you want to give your child the best opportunity for success, and for many, attending the “right” university or college is that opportunity. Unfortunately, being accepted to the college of one’s choice may not be as easy as it once was. Additionally, the earlier you consider how you expect to … Continue reading “Countdown to College”

Feb 24, 2021

New inherited IRA rules took effect on January 1, 2020. The Setting Every Community Up for Retirement Enhancement (SECURE) Act became law on that day, altering the regulations on inherited Individual Retirement Account (I.R.A.) distributions. The big change: the introduction of the 10-year rule for beneficiaries. Most people who inherit a beneficiary IRA now have … Continue reading “The New Inherited Beneficiary IRA Rules”

Feb 22, 2021

How do you picture your future? If you are like many contemplating retirement, your view is likely pragmatic compared to that of your parents. That doesn’t mean you must have a “plain vanilla” tomorrow. Even if your retirement savings are not as great as you would prefer, you still have great potential to design the … Continue reading “Retirement Seen Through Your Eyes”

Feb 19, 2021

At this time last year, it was still unknown that a deadly global pandemic was on the rise, eventually stalling economic growth and sending crude oil prices into negative territory. But recently, oil prices have surged, with crude hitting highs not seen since before the pandemic.

Feb 17, 2021

It can be easy to overlook the nation’s solid economic fundamentals when the financial media splashes stories every day about an army of amateur traders, short-selling mania, and initial public offerings (IPOs) that double in price on the first day of trading. But a recent survey by The Wall Street Journal showed just how upbeat … Continue reading “Economic Predictions: What Lies Ahead?”

Insights + Resources >