Paying for Long Term Care

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Paying For Long-Term Care

Overview

The cost of long-term care can vary quite a bit depending on what kind of care you need, where you get the care, and where you live. The chart below shows a comparison of available financing options:

Financing Option	Only Available for Long-Term Care Costs	Remaining Funds Available to Heirs	Rate of Asset Accumulation	Eligibility Requirement	Risk of Insufficient Funds	Cost
Family Support and Caregiving	No	No	None	No	Moderate -- Family members may be unable/unwilling to provide care	You pay for services that family members are unwilling to provide
Personal Savings	No	Yes	Variable	No	High -- Long-Term Care costs can exceed your personal savings	You are responsible for creating private savings
Long-Term Care Insurance	Yes	No	Fixed	Yes	Moderate to Low -- Long-Term Care costs could exceed original coverage amount	Monthly premiums for the life of the policy
Limited Long-Term Care Insurance	Yes	No	Fixed	Yes	Moderate to Low -- Long-Term Care costs could exceed original coverage amount	Large one-time or short-term monthly premium
Life Settlement	Yes	No	Fixed	Yes	Moderate to Low -- Amount received from benefit may not pay all long-term care costs	None
Viatical Settlement	Yes	No	Fixed	Yes	Moderate to Low -- Amount received from benefit may not pay all long-term care costs	None
Accelerated Death Benefit	Yes	No	Fixed	Yes	Moderate to Low -- Amount received from benefit may not pay all long-term care costs	None
Reverse Mortgages	No	Yes	Variable	Yes	Moderate -- Amount received from benefit may not pay all long-term care costs -- Home maintenance costs still exist	Processing and origination fees to establish mortgage
Continuing Care Retirement Community	Yes	Yes	Variable	Yes	Low -- Additional care provided as needed in CCRC assisted living or nursing facility	High purchase price and fixed monthly payment required of CCRC property
Veterans Benefits	No	No	None	Yes	Moderate to High -- Amount received from benefit may not pay all long-term care costs	None
Medicare	No	No	None	Yes	Moderate to High -- Amount received from Medicare may not pay all long-term care costs	Co-payments and deductibles
Medicaid	No	No	None	Yes	High -- Amount received from Medicaid may not pay all long-term care costs -- Recovery of Medicaid may be made against estate	You pay for services not covered by Medicaid
PACE	Yes	No	None	Yes	Moderate to High -- Amount received from benefit may not pay all long-term care costs	You pay for services not covered by PACE

Page Last Updated: July 2, 2007

Source: http://www.medicare.gov/LongTermCare/Static/Home.asp

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