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Long Term Care is a complex topic with no right answer because it depends on your present health as well as your own family history. Self insuring is the common method people take and is risky because this requires paying for care until resources are depleted enough to qualify for government programs. This is risky for couples since the one not needing the care is left with reduced resources to support their lifestyle.
If you’re in the category of what I call “over-savers,” or have saved more than enough to cover living expenses for you (and your spouse for couples), then perhaps self-insuring by spending down those extra saved dollars may work for you.
Of course, there is also the competing goal some people may have to leave something to their heirs. Spending down resources to qualify for government programs would leave less for such a bequest goal.
For those in-between those with plenty of resources, and no resources (already qualify for government assistance), the choice may be difficult. Customizing a plan to make it affordable may be the choice. There is no right answer – except the one you decide.
From Healthcare.gov website:
“Long-term care
Services that include medical and non-medical care provided to people who are unable to perform basic activities of daily living such as dressing or bathing. Long-term supports and services can be provided at home, in the community, in assisted living or in nursing homes. Individuals may need long-term supports and services at any age. Medicare and most health insurance plans don’t pay for long-term care.” (my emphasis added). This is a common misperception.
Finally, most people think of this as care when one is old. However, the criteria has NOTHING to do with age, but the inability to perform certain activities, which could occur AT ANY AGE.
PS. Long Term Care is about inability to do certain activities. Disability Insurance is replacing lost income. They are not the same and could both be useful for those still working.
PPS. An in-depth study to health care, including Long Term Care, may help you decide your course of action: “Vanguard engaged Mercer Health & Benefits to develop a model to forecast health care costs for U.S. retirees.”
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