Healthcare Costs Can Bankrupt You

A major decision for most people nearing retirement is whether or not to purchase long-term health care insurance policies. On the one hand, the cost of living in a nursing home or assisted living facility, or having a live-in nurse at home, can be in the tens of thousands of dollars every year. This high cost is pretty much universal, so it doesn’t matter in which part of the United States that you live, it will still cost a bundle.

On the other hand, the average long-term health care insurance policy is extremely expensive, highly restrictive and, as Americans are living longer and requiring more healthcare, premiums continue to spike.

In fact, the cost of long-term healthcare is so high that less than 8% of Americans actually have it. Even worse is that many consumers believe that Medicare will be around to take care of their long-term health care needs when, in reality, most consumers end up using their own money and turn to Medicaid when it runs out.

Unfortunately there’s really not an easy answer when it comes to planning for your or your spouse’s long-term health care needs. That, along with the high cost, has many Americans worried about what will happen the day that they or someone they love has a protracted illness that requires long-term care.

Some good news came out of a recent study that showed the risk of requiring long-term care might not be as high as experts previously thought, pointing to the fact that research had overstated the duration of time that most people would need it.

Anthony Webb, from the Center for Retirement Research, US, authored the study, which shows that the stay most people have in nursing homes is a relatively short 11 months for men and 17 months for women. The study also showed that, when it comes to actually needing a nursing home and the care it provides, 44% of men and 50% of women would one day find themselves needing that care.

For consumers that have substantial savings and retirement and little or no debt, self insurance is probably their best bet and, in most cases, won’t jeopardize their lifestyle goals in retirement.

Tom Hebrank, a long-term care insurance specialist from Atlanta, advises that it doesn’t have to be “all or nothing”. For example, he says that buying a more limited long-term care plan and paying the rest from savings would bring the cost of long term insurance down considerably.

If the decision to purchase long-term care insurance is one that you need to make, the American Association of Long Term Care Insurance will give you free quotes on different options.

One thing to remember is that one of the best ways to preserve your assets, as well as take care of a surviving spouse, is to have long-term care insurance because, without it, accessing money to pay might not be easy. That’s especially true if most of your wealth is tied up in your home or other, non-liquid assets.