How long-term care insurance can cut home health care costs

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Long-term care insurance can help you reduce the cost of home health care later in life.

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The most Americans People aged 65 or older – or about 70% – need long-term care services at some point in their lives. But that doesn’t necessarily mean that the majority of Americans are subject to a to a nursing home or home care. There are treatment options for them who want to age in placealso.

One of the most expensive aspects of aging can be the need for a home health aide. However, if you make smart financial decisions before they become a necessity, you may be able to reduce the cost of home health care. And, long-term care insurance can help.

Find the right long-term care insurance to reduce home health care costs.

How long-term care insurance can cut home health care costs

Home care aids can be quite expensive. According to a Genworth Cost of Care study, the annual cost of a home health aide could rise to $69,529 by 2025. So does long-term care insurance cover this expense?

“Long-term care insurance generally covers home health aides, but only under certain conditions,” says Joseph Fresard, senior legal and estate planning attorney at Simasko Law.

However, this does not mean that all policies offer this coverage. “You should check the policy to see if it covers home health care and, if so, what the terms may be” before purchasing coverage, Fresard says.

So as long as you choose a policy that offers home health aide coverage, you can typically use it to lower the cost of a home health aide. It usually works in two ways:

Long-term care insurance can cover all the costs of home healthcare

One way use long-term care insurance Reducing the cost of a home health aide is by purchasing enough coverage to cover the entire cost. To do this, it can help assess when you may need home health care. You can then use the average cost of care information to determine a cost estimate for home health aides in the year you may need them.

It can also help plan for a few years of coverage. For example, if you find that your home health aide might cost $70,000 a year, it might be beneficial to purchase $210,000 in long-term care insurance—or three times your expected annual care costs.

Explore long-term care insurance options online now.

Long-term care insurance can also provide additional coverage

Like most types of insurance, long-term care insurance becomes more expensive with the insured amount is increasing. For example, you would pay much higher premiums for a $250,000 policy than for a $150,000 policy. So premiums may be too high if you plan to cover 100 percent of your home health care costs with long-term care insurance.

However, there is a way to reduce costs.

Instead of relying on long-term care insurance that covers 100% of home health care costs, consider using the policy as an additional resource instead. For example, you may have factored in some increased health care costs as part of your retirement plan. Let’s say you expected to spend $25,000 a year on rising health care costs.

You probably won’t need as much long-term care insurance when you consider the $25,000 a year you’ve already saved. For example, if you determine that the cost of a home health aide is $70,000 per year, you may only need about $45,000 per year – which can result in a significant decrease in your premiums.

In other ways, long-term care insurance can help you age

Whether you need a home health aide or not, long-term care insurance can make aging in place easier instead of moving into a nursing home or home care. Here are a few ways this type of coverage can help:

  • Home renovations: As you age, you may develop conditions that make your home more difficult to access. Long-term care insurance may cover the cost of the renovation to improve accessibility. With your insurance, you can, for example, pay for the installation of shower handles or a ramp leading to the front door.
  • Caregivers: Your policy may to offer your family compensation about providing care. If you plan to rely on your family for care, make sure your insurance covers formal and informal caregivers.
  • Equipment: Long-term care insurance can help cover the cost of equipment not covered by other insurance. For example, your insurance can pay for traction devices or stairlifts if such devices become a medical necessity.

Get long-term care insurance to help you age today.

Result

Home care aids can be expensive, but if you act before you need one, you may not have to foot the bill yourself. Many long-term care policies help cover the cost of home health care and other costs associated with aging. By purchasing long-term care insurance now, you can be better prepared to pay the costs of your care later.

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