70% of folks over 65 will need some sort of long-term care (LTC) in their lives. Medicare does not cover LTC, except for a brief period after an in-patient hospital stay. 20% of LTC need is for over 5 years.
So the question is – “What is the plan?”.
The largest payor (30%) of LTC is Medicaid. However, one must qualify for Medicaid, which, in a simple explanation, means that the individual has zero assets (or has spent them) and little income.
Historically, and today, long-term care is delivered by a family member is the most common way to address long term care.
However, the individual family member must have the skills necessary. The cost is the burden on the family member. They may not be able to earn income because of the time necessary to give care.
A plan can be to put aside money designed to pay for long-term care costs. To protect this money, it might be held in a health savings account or as cash value in an indexed universal life insurance policy.
As mentioned, Medicaid is the single largest payor of LTC. Medicaid is a program for very low income & asset individuals. Medicare does not pay for LTC.
There are various insurance products that can be used to pay LTC costs. Long-term care insurance is the most common. In general, to activate the policy, the patient must be able to do 2 of 6 “activities” of daily living such as bathing, toileting, cooking, etc.
Other insurance options are to have a long-term care rider on a life insurance policy, or as part of an annuity.