6 Ways to Pay for a Long-Term Care Stay

6 Ways to Pay for a Long-Term Care Stay

What do you think of when you hear the phrase “long-term care?”

Insurance, expensive, never-gonna-happen-to-me?

If any of this rings a bell, you’re on the right track.

 ↳ Long-term care insurance is expensive,

 ↳ A nursing home stay is very expensive, and

 ↳ Most people think they’ll never end up in a nursing home.

I’m here to tell you that the odds are against us all. I’m also here to tell you that there’s more than one way of paying for long-term care.

Here’s what statistics tell us: There’s a 70% chance that we’ll need some kind of extended care after we’re 65.

Now, most of us never see ourselves living in a nursing home. And who can blame us? We feel just as young as we did when we were in our 20s! But the problem is, there’s other scenarios where we might need some extra help, and it’s not just from getting old.

Let’s say it’s a really frosty winter, and you slip on a patch of ice. You’re rushed to the ambulance, and the doctors tell you the sorry news – you’ve broken your hip.

You can’t walk, and hospitals won’t let you stay for an extended period of time. You’re officially in need of assistance. A lot of people in this situation either go into an assisted living facility, or they bring in a skilled nurse to take care of them in their own home.

They both have the same thing in common: expensive. And sorry to break the news, but Medicare doesn’t touch extended care after the first 100 days.

How do you plan on paying for this?

Option #1: Your Savings

A good chunk of change in your savings account will pay for your extended care. However, here’s the reality of the situation.

According to national averages,

  • A private room in a nursing home costs $229 per day,
  • A home health aide costs $21 per hour, and
  • An assisted living facility costs $110 per day.

When you account for this kind of care over the course of a year, here’s where you stand:

  • A private room in a nursing home costs $83,585 per year.
  • A home health aide costs $43,680 per year.
  • An assisted living facility costs $40,150 per year.

And what happens if you break your hip again? Or you fracture your ankle? Or you forget to turn the oven off sometimes? Or you start suffering from common diseases like Alzheimer’s or Dementia? Or you just start aging like we all eventually will?

If you can’t do everyday activities on your own, or if you start forgetting things (called cognitive impairment), you’ll need extra help.

Option #2: Don’t Pay. Get Your Family to Help.

So, you’ve broken your hip and you can’t do everyday activities by yourself. Why pay a skilled nurse to come in and take care of you when you have a loving family to do it for free?

It’s a great thought, but it should be swiftly disregarded.

Before we get into statistics, I’d like you to ask yourself a couple of questions.

  • Do you want your family to give up their own lives to take care of you?
  • Would you rather have someone who has been properly trained to take care of you?
  • Do you really want your children to help you do private things like dressing and using the bathroom?

Now that you’re mulling that over, here are the stats:

  • 32% of adults say caring for an aging parent is stressful (Pew Research Center).
  • The average family caregiver spends $5,531 per year on caregiving expenses (AARP).
  • 23% of family caregivers report their health is fair or poor (AARP).
  • Those who care for parents with dementia have reported a negative impact on their immune system for up to 3 years after the caregiving ends (Proceedings of the National Academy of Sciences).
  • 40-70% of family caregivers have clinically significant symptoms of depression (Zarit).
  • Family caregivers experience extreme stress, which causes premature aging. This has been estimated to take as much as 10 years off of a family caregiver’s life (National Academy of Sciences).

If this is your last resort, OK, but it’s not an ideal situation for anyone involved, especially if you need care for a longer period of time.

Option #3: Lose Your Assets and Go on Public Aid (Medicaid)

Losing your home to the nursing home isn’t unheard of. In fact, it’s pretty common.

If you don’t have any way to pay for a stay at a nursing home, you will have to sell your house, your car, and any other assets you own. Then, you will end up on state aid, called Medicaid.

If you have assets to protect, you don’t want to rely on this option. You could lose everything you’ve worked for.

Option #4: Long-Term Care Insurance

Now we get to one of the most popular options in the world – buying some sort of long-term care (LTC) insurance policy.

This is a fantastic solution for those of us who are younger, very healthy, and well-off.

The reality of the situation is that you can’t even buy LTC insurance if you’re over the age of 85. Even if you’re younger, the cost of this kind of insurance is sky-high after you reach about 60 years of age.

Even worse, it’s nearly impossible to even be accepted if your health isn’t in great shape.

While it’s the perfect option for those in their 40s-50s, it’s not realistic for the rest of us.

Option #5: Short-Term Care Insurance

This type of insurance is somewhat of a spinoff of long-term care insurance. And hopefully, you don’t get confused about the different names it has – short-term care, recovery care, extended care, nursing home care – they all mean the same thing. With short-term care insurance, there’s a shorter cap on how long the benefit period is.

For example, with a long-term care insurance policy, you might purchase a plan that would pay for up to 4 years in a nursing home.

With this type of plan, the maximum amount you can buy is 1 year of coverage in a nursing home.

While it’s not ideal, it’s far better than having no protection at all.

You can purchase this product up to age 89, the health questions are very simple and easy to pass, and best of all? It’s affordable.

Another pro about this product is that it rarely, if ever, has any rate increases.

Option #6: Life Insurance with a Long-Term Care Rider

Possibly our favorite option of them all is the hybrid product – life insurance with a long-term care rider.

This basically means that you can purchase a life insurance policy, but if you end up in a nursing home, you can use that money to pay for it, which is pretty awesome.

The big draw of this 2-in-1 policy is that you know you’re going to use the money, one way or another. Other insurance policies don’t have that same luxury – even if you have car insurance, there’s no guarantee you’ll ever make a claim, right? (Not that you’d want to.)

At least with this hybrid, you know that the money you put into it will eventually pay off.

If you’d like to talk more about your options with a long-term care expert, reach out to our team at Sams/Hockaday. We’d be glad to give you some quotes so you can determine what this would look like for your own budget.

Calculate Your Medicare Costs Today

Create a Medicare action plan by estimating your total monthly premiums for healthcare and related expenses in retirement.

Get My Worksheet
Calculate Your Medicare Costs Today

Here's what our clients say…

Disclaimer: We do not offer every plan available in your area. Currently we represent 4 organizations which offer 41 products in your area. Please contact, 1‑800‑MEDICARE, or your local State Health Insurance Program to get information on all of your options.