Long Term Care - Five Commonly Held Misconceptions

Americans over 45 do not give a lot of thought to long term care. When they do, more often than not they are wrong, according to the American Association of Homes and Services for the Aging (AAHSA), a not-for-profit organization dedicated to caring for the elderly. Most people do not realize how often long term care is required, how much it costs, or what can be done to prepare for it. The lack of knowledge is disconcerting because 7 out of 10 Americans who live to be 65 will require long term care.

Here are five widespread misconceptions about long term care:

1. Medicare pays for a nursing home stay. 59% of Americans surveyed by AAHSA believe Medicare will pay for an extended stay in a nursing home. Not true. Medicare will pay for a short rehabilitation period after hospitalization, but not for long term care.

2. Medicare pays for assisted living. 52% of those surveyed think Medicare will pay for assisted living care. This also is not true.

3. Nursing home care costs less than $60,000 a year. 92% of those surveyed were unable to estimate the cost of nursing home care within 20% of the actual cost, which is $74,806 per year. Fully 20% of survey respondents admitted that their estimates of long term care costs were guesswork.

4. Assisted living costs less than $26,000 a year. Wrong. The actual cost of living in an assisted living facility for one year is $32,572. Three quarters of those surveyed were unable to estimate the cost of assisted living within 20% of the real cost.

5. Medicaid is the solution. Medicaid accounts for 49% of all long term care spending, but the government program comes with strings attached. You will have to divest yourself of many assets to meet the program’s low-income eligibility requirements. Your family home does not count toward Medicaid eligibility, but that is true only while you live in it. Depending on where you live, your state most likely can attach a lien to your house recover Medicaid payments if you enter a nursing home permanently (unless your spouse is still living in the house). With the lien in place, you cannot sell or refinance the house without reimbursing the state. Many states also can seek reimbursement for Medicaid payments after you die.

In less than 15 years, more than twelve million Americans will require long term care, yet only seven million have long term care insurance. If you are among the five million are uninsured and want to keep your assets and protect your home, now is the time to look into long term care insurance.


Bradley Steffens

Bradley Steffens is a copywriter and the author of twenty-eight books. He has written for a range of clients in the financial, healthcare, and high tech industries, including Raymond James Financial, Cardinal Health, and Del Tel, Inc. His latest book is a biography of the medieval Arab scientist, Alhazen.
View all articles by Bradley Steffens

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