Do Most Americans Really Believe Medicare Covers Long-Term Care? Discover the Truth!

Many Americans wrongly believe that Medicare will cover their long-term care needs. This misunderstanding is concerning, especially since about 70% of people over 65 will require such care at some point in their lives, according to Holly Snyder, president of Nationwide Life Insurance. It’s essential to understand what long-term care actually entails.

Long-term care involves assistance with daily activities like bathing and eating. A study from Boston College shows that 80% of people will need help as they age. Alarmingly, a recent survey by Nationwide found that 58% of U.S. adults mistakenly think Medicare provides coverage for long-term care.

While Medicare does cover some short nursing home stays, it typically doesn’t pay for longer-term care. The primary reason is that most long-term care is not deemed medical care. Instead, it’s considered custodial care, which includes help with everyday activities. Patrick Simasko, an elder law attorney, highlights the confusion between Medicare and Medicaid in this context. Medicaid helps cover long-term care for those who have exhausted their savings.

With rising long-term care costs—averaging around $5,350 per month for assisted living and about $9,733 for nursing homes—many Americans find themselves unprepared. A notable trend is that only about 4% of seniors have long-term care insurance. Many people think they don’t need to buy this insurance since they assume Medicare will take care of them.

Additionally, a survey by the Employee Benefit Research Institute (EBRI) revealed that only 40% of workers believe they will need long-term care. Surprisingly, many also underestimate the costs involved, often thinking they won’t exceed $50,000. This significant gap in understanding can leave individuals vulnerable as they age.

Bridget Bearden of EBRI points out the emphasis on retirement savings often overshadows the risks of aging. Many don’t realize that Medicaid requires them to spend nearly all their assets before qualifying for assistance. This creates a situation where those who are middle-class might struggle the most for care options.

Experts suggest considering long-term care insurance, which can vary widely in cost and benefits. A typical policy might cost around $950 a year for men and $1,500 for women, depending on the coverage. Innovations like hybrid policies are now available, where unused benefits can go to heirs instead of being lost.

Furthermore, costs can differ significantly based on location. For instance, assisted living in Albany, New York, can reach an average of $8,093 per month, while Boulder, Colorado, averages around $4,600. It’s wise to research options in nearby suburbs or consult a cost-of-care calculator for better insights.

Ultimately, it’s essential to have conversations with financial planners who can help navigate the complex landscape of retirement costs, including long-term care planning. As emphasized by Snyder, preparing now can save significant stress later.

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