Category: Aging Well
Planning for Long-Term Care & Future Costs
Long-term care is help needed over an extended period because of illness, disability, changes in memory or thinking, or difficulty managing everyday activities.
It may be provided at home, in the community, or in a residential setting.
Many people assume Medicare will pay for long-term care if they eventually need it. Medicare may cover certain medical, rehabilitation, home health, or short-term skilled nursing services under specific conditions, but it generally does not pay for ongoing help with everyday personal care.
Planning ahead can help you understand your options, prepare for possible costs, and communicate how and where you would prefer to receive support.
You do not need to predict exactly what will happen. You need a flexible plan that can be adjusted as your circumstances change.
Understand What Long-Term Care Includes
Long-term care is sometimes called long-term services and supports.
It may include help with personal activities such as:
- Bathing.
- Dressing.
- Grooming.
- Eating.
- Using the bathroom.
- Moving between a bed and chair.
- Walking safely.
It may also include help with:
- Preparing meals.
- Cleaning.
- Laundry.
- Shopping.
- Transportation.
- Managing medications.
- Paying bills.
- Scheduling appointments.
- Supervision because of memory or safety concerns.
- Managing a chronic health condition.
Some people need assistance for only a few hours each week. Others need daily support, overnight supervision, or care available around the clock.
Long-Term Care Can Be Provided in Different Settings
Care may be provided through:
- Family or friends.
- Home-care agencies.
- Independent caregivers.
- Home health agencies.
- Adult day programs.
- Community meal and transportation programs.
- Assisted living.
- Memory care.
- Adult family or residential care homes.
- Continuing care retirement communities.
- Nursing homes.
The setting may change over time.
Someone may begin with meal delivery and housekeeping, later add personal-care assistance, and eventually move to a community that provides more supervision.
The National Institute on Aging explains the range of long-term care services and settings.
Think About Your Possible Needs
No one can know exactly what care they will need.
Consider factors that may increase or reduce the amount of future support required:
- Current medical conditions.
- Mobility.
- History of falls.
- Memory or thinking changes.
- Family medical history.
- Home layout.
- Whether you live alone.
- Availability of family or friends.
- Transportation.
- Financial resources.
- Access to community services.
- Personal preferences.
Ask yourself:
- Where would I prefer to receive care?
- Who might be available to help?
- What support could realistically be provided at home?
- What would require paid assistance?
- Is my current home safe and accessible?
- What would happen if I could no longer drive?
- How would my plan change if I needed supervision at night?
- Which alternatives would I consider if remaining home no longer worked?
The goal is not to choose one permanent option. It is to understand the likely choices before a crisis.
Learn What Medicare Covers
Medicare is health insurance. It is not comprehensive long-term care insurance.
Medicare may cover certain services, including:
- Short-term skilled nursing care after a qualifying hospitalization.
- Skilled nursing or therapy at home when eligibility requirements are met.
- Physician services.
- Hospital care.
- Rehabilitation.
- Certain medical equipment.
- Hospice care for people who qualify.
Medicare generally does not cover long-term custodial care when that is the only care needed.
Custodial care includes ongoing help with activities such as bathing, dressing, eating, and using the bathroom.
Medicare also generally does not pay for:
- Around-the-clock care at home.
- Long-term stays in assisted living.
- Most long-term nursing home stays.
- Homemaker services unrelated to a medical care plan.
- Home-delivered meals.
- Personal care when no qualifying skilled care is needed.
Review Medicare’s current long-term care coverage information and contact your plan directly before assuming a service will be covered.
Medicare Advantage plans may offer additional benefits, but coverage varies by plan and location.
Understand Medicaid
Medicaid is a joint federal and state program that may pay for long-term services and supports for people who meet financial, functional, and other eligibility requirements.
Depending on the state and program, Medicaid may help pay for:
- Nursing home care.
- Personal care.
- Home health services.
- Adult day services.
- Case management.
- Home and community-based services.
- Certain assisted living services.
- Respite care.
Medicaid does not operate the same way in every state.
Programs may have:
- Income limits.
- Asset limits.
- Medical or functional eligibility requirements.
- Waiting lists.
- Limits on available services.
- Rules affecting transfers of money or property.
Do not give away money or transfer property to qualify without receiving qualified legal advice. Medicaid eligibility and estate-recovery rules can be complicated, and an improper transfer may delay eligibility.
Learn about your state’s programs through Medicaid’s home and community-based services information or your local Medicaid office.
Consider Veterans’ Benefits
Some veterans and surviving spouses may qualify for benefits that help with personal care, home support, assisted living, or nursing home care.
Eligibility may depend on:
- Military service.
- Discharge status.
- Health needs.
- Income.
- Assets.
- Other program requirements.
Contact the U.S. Department of Veterans Affairs or an accredited veterans service officer.
Be cautious of anyone who guarantees eligibility, charges large upfront fees, or pressures you to rearrange assets or purchase financial products.
Review Long-Term Care Insurance
Long-term care insurance may help pay for eligible care at home, in the community, or in a facility.
Policies vary considerably.
Review:
- Which services are covered.
- Whether home care is included.
- Whether assisted living or memory care is covered.
- The daily or monthly benefit.
- The maximum benefit period.
- The lifetime maximum.
- The elimination or waiting period.
- The conditions that trigger benefits.
- Inflation protection.
- Exclusions.
- Premium history.
- Whether premiums may increase.
- What happens if you stop paying.
- Whether informal family care is covered.
Coverage is generally less expensive when purchased at a younger age, but premiums may still be substantial. Health conditions may affect eligibility.
Do not purchase a policy based only on the monthly premium. Make sure you understand what the policy would actually pay and whether you could continue affording it if premiums increased.
The Administration for Community Living provides an overview of long-term care insurance.
Estimate Local Care Costs
Long-term care costs vary widely by location and level of support.
Research current prices for:
- Homemaker services.
- Personal-care aides.
- Adult day programs.
- Emergency-alert systems.
- Meal delivery.
- Transportation.
- Home modifications.
- Assisted living.
- Memory care.
- Nursing home care.
Ask providers whether rates include:
- Meals.
- Housekeeping.
- Transportation.
- Medication assistance.
- Personal care.
- Supplies.
- Overnight support.
- Additional charges based on care level.
- Annual increases.
A facility’s advertised starting price may not reflect the actual cost after personal-care charges, medication management, transportation, and other fees are added.
Use local prices rather than relying only on national averages.
Create Several Cost Scenarios
Instead of trying to predict one exact future, estimate several possibilities.
Limited Support at Home
Include possible costs for:
- Cleaning.
- Meal delivery.
- Transportation.
- Yard work.
- Home modifications.
- Several hours of personal care each week.
Daily Support at Home
Include:
- Personal-care assistance.
- Medication help.
- Meal preparation.
- Adult day services.
- Transportation.
- Respite care.
- Increased household support.
Residential Care
Estimate:
- Assisted living.
- Memory care.
- Nursing home care.
- Moving costs.
- Community fees.
- Additional care charges.
Compare these costs with expected income, savings, insurance, benefits, and housing expenses.
A paid financial advisor who acts as a fiduciary, elder-law attorney, benefits counselor, or qualified insurance professional may help evaluate the options.
Include the Cost of Unpaid Caregiving
Care provided by family or friends may not appear on a bill, but it is not necessarily free.
Caregiving can affect:
- Work hours.
- Income.
- Retirement savings.
- Health insurance.
- Transportation expenses.
- Physical health.
- Emotional well-being.
- Relationships.
Do not build a plan that assumes one person will provide unlimited care indefinitely.
Ask potential caregivers:
- What help could you realistically provide?
- How often?
- For how long?
- Which tasks would require professional care?
- What backup is available?
- What would happen if your own health or work situation changed?
Paid support, respite care, or shared responsibilities may make family help more sustainable.
Review Your Financial Resources
List resources that might help pay for care:
- Social Security.
- Pension income.
- Retirement accounts.
- Savings.
- Investments.
- Home equity.
- Long-term care insurance.
- Life insurance benefits.
- Veterans’ benefits.
- Medicaid.
- Family contributions.
- Other income.
Also list ongoing obligations:
- Housing.
- Taxes.
- Insurance.
- Debt.
- Utilities.
- Food.
- Healthcare.
- Support for a spouse or dependent.
- Home maintenance.
Do not assume that selling a home, using a reverse mortgage, purchasing an annuity, or changing an insurance policy is automatically the best choice. These decisions can affect taxes, benefits, inheritance, housing security, and a spouse’s finances.
Obtain independent financial and legal advice before making major changes.
Protect a Spouse or Other Household Member
A long-term care plan should consider everyone who depends on the same income, property, or support.
Ask:
- Could a spouse continue paying household expenses?
- Would one person’s care costs leave enough for the other?
- Who would maintain the home?
- Would the spouse need to move?
- Are beneficiary designations current?
- Do legal documents provide the necessary authority?
- How would caregiving affect the spouse’s health?
Medicaid has certain protections for spouses, but the rules are complex and state-specific. An elder-law attorney or qualified benefits counselor can explain how the rules may apply.
Complete Legal and Healthcare Planning
Long-term care planning should include:
- A will.
- Financial power of attorney.
- Healthcare proxy.
- Advance directive.
- Current beneficiary designations.
- Organized financial records.
- Medical information.
- Emergency contacts.
- Care preferences.
These documents do not pay for care, but they help trusted people manage decisions and carry out your wishes.
Complete them while you can fully understand and approve the choices.
Review the Plan Regularly
Review your long-term care plan after:
- A new diagnosis.
- A fall or hospitalization.
- A change in mobility.
- Memory or thinking changes.
- Retirement.
- Death or illness of a spouse or caregiver.
- Moving.
- A major financial change.
- An insurance premium increase.
- A change in Medicaid or veterans’ eligibility.
- A significant increase in local care costs.
Even without a major change, review the plan every few years.
Take the First Steps
Begin by:
- Writing down where you would prefer to receive care.
- Identifying who might realistically help.
- Researching local home-care and residential costs.
- Reviewing insurance and benefit eligibility.
- Listing available income and assets.
- Completing legal and healthcare documents.
- Discussing the plan with the people involved.
- Identifying a backup if the preferred arrangement stops working.
The plan does not have to eliminate every financial risk.
Its purpose is to help you understand the choices, prepare for likely costs, protect the people involved, and make future decisions with more information and less pressure.
