Disclaimer: With Medicaid, VA, and insurance regulations frequently changing, past blog posts may not be presently accurate or relevant. Please contact our office for information on current planning strategies, tips, and how-to's.
How much do your clients know about long-term care? Unfortunately, many people believe in some common misconceptions about the cost of care, who pays, and how to plan for a care need. Find out if your clients can pass this long-term care quiz and take advantage of the opportunity to discuss their long-term care plans.
The Long-Term Care Quiz
True or False?
- In most cases, Medicare covers the cost of long-term care.
- More than 50% of individuals turning 65 today are expected to require long-term care.
- Most Americans can afford to pay out of pocket for professional long-term care.
- The median cost of a nursing home in the U.S. is almost $100,000 per year.
- Long-term care planning is beneficial for most Americans.
- In order to qualify for a Long-Term Care Insurance policy, you need to be relatively young and healthy.
- If you purchase Long-Term Care Insurance and don’t end up requiring care, you’ll lose the full benefit.
- Medicaid is the largest payer of long-term care in the U.S.
- The main reason most people can’t qualify for Medicaid is having too many countable assets.
- If you have too many assets to qualify for Medicaid, you must deplete them by paying the nursing home bill in order to become eligible for benefits.
Answer Guide
1. In most cases, Medicare covers the cost of long-term care.
False. Medicare only covers skilled nursing care after a qualifying hospital stay of at least three days and for rehabilitative purposes. Plus, Medicare only provides full coverage for the first 20 days and partial coverage for the following 80 days and only if the patient is showing signs of improvement.
Read More: Does Medicare Cover Long-Term Care?
2. More than 50% of individuals turning 65 today are expected to require long-term care.
True. According to the United States Department of Health and Human Services, more than one-half of older adults are projected to need professional long-term care services during their senior years.
3. Most Americans can afford to pay out of pocket for professional long-term care.
False. Long-term care is expensive. Only those with a high net worth can afford to pay out of pocket for their care. The majority of individuals who need professional care risk depleting their entire life savings by paying the bill.
4. The median cost of a nursing home in the U.S. is almost $100,000 per year.
True. According to the Genworth Cost of Care Survey, the median cost of a semi-private room in a nursing home in 2021 was $7,908 per month. The median cost of an assisted living facility was $4,500 per month ($54,000 annually) and $5,148 per month (over $60,000 annually) for a home health aide.
5. Long-term care planning is beneficial for most Americans.
True. Since more than 50% of people turning 65 are expected to need long-term care at some point, planning for this care is a crucial piece of the retirement planning process. Purchasing Long-Term Care Insurance is the best way for your clients to set aside funds for their future care and protect their assets from paying these costs. However, you can also help clients who imminently need care protect their life savings.
Read More: 12 Reasons to Plan for Long-Term Care
6. In order to qualify for a Long-Term Care Insurance policy, you need to be relatively young and healthy.
True. The underwriting process for LTCI is pretty rigorous. Applicants with certain conditions or ailments may be declined coverage. Fortunately, we offer anonymous pre-screening, so your clients can find out whether they are a good candidate for LTCI and avoid receiving a decline on their record.
7. If you purchase Long-Term Care Insurance and don’t end up requiring care, you’ll lose the full benefit.
False. Your clients can opt for an LTCI policy with a guaranteed death benefit, which will be reduced dollar-for-dollar for any benefits used. In the event the policyholder never requires long-term care, the full death benefit will be passed to their intended heir(s).
8. Medicaid is the largest payer of long-term care in the U.S.
True. According to the Centers for Medicare and Medicaid Services (CMS), Medicaid pays for 42.1% of long-term care costs in the U.S. Medicaid covers the cost of an individual’s custodial care in a nursing home, including room and board, pharmacy, and incidentals. However, in order to qualify, applicants must meet specific financial and non-financial criteria.
9. The main reason most people can’t qualify for Medicaid is having too many countable assets.
True. In most states, the institutionalized individual can only keep $2,000 in countable assets. If they have a healthy spouse at home, that spouse can keep a separate, larger allowance of over $100,000 in many cases. However, most individuals and couples still have excess assets impeding their eligibility.
10. If you have too many assets to qualify for Medicaid, you must deplete them by paying the nursing home bill in order to become eligible for benefits.
False. Most Americans believe this misconception. Fortunately, you can help your clients accelerate their Medicaid eligibility while protecting their hard-earned assets with a powerful spend-down tool—the Medicaid Compliant Annuity.
Watch Now: Crisis Planning 101: An Introduction to Medicaid Compliant Annuities
If you’d like to learn more about helping clients plan for their long-term care, whether they’re planning ahead or seeking immediate relief, we can help! Schedule a call with one of our advisors today.
