How Long-Term Care Insurance can save your Retirement

One of the benefits of the health care debate is that Americans are beginning to realize what is at stake.  Now, millions of people stand to lose their health insurance.  If the proposed Medicaid cuts are enacted, tens of millions will lose coverage for their custodial care needs in later life. 

What is long-term care?  Long-term care is custodial care, which means that we need help with some of the everyday activities of living:  eating, bathing, dressing, toileting, continence, and transferring (mobility).  Or, because we are cognitively impaired, we need guidance.

Custodial care is different from medical care, as you can see.  I may need help because I am weak, for example, or unsteady on my feet–but I do not need to go to my doctor for it because this is my condition now, and the doctor can’t cure it.

Most Americans do not have a plan to handle long-term care needs.  They mistakenly think that Medicare will take care of it.  And now, the real backstop–Medicaid–may not help us either.

As Ron Lieber noted recently in the New York Times, Medicaid gets a bad rap: “We assume, incorrectly, that Medicaid is only for the younger poor or those with disabilities and that Medicare will pay for most nursing home care.  Emotionally, we just cannot handle the prospect of our breaking down in old age.  So we put our heads in the sand.” 

Some plan is better than no plan.  Accepting individual responsibility for planning is the first step.  There are only three ways to pay for long-term care expenses:  private money, long-term care insurance, or Medicaid.  If Medicaid will not be an option, how will you pay for your long-term care?

Time to make a plan.

See my first post on long-term care here.

Ron Lieber has done some excellent reporting in the New York Times on Medicaid and the impact of the proposed cuts.  Here are links to two of his articles:


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