There is a big misconception that regular health insurance or Medicare covers nursing home costs, but that is incorrect. Nursing homes run $500/day, completely out of pocket. To avoid spending your retirement savings on long-term care, look into LTC insurance early, when premiums are lower. Another option is Medicaid – but you must have limited assets to qualify. There is a 5-year lookback period, so you must deplete assets well in advance through an irrevocable trust. Make a trusted child the trustee so assets aren’t squandered. With proper planning, you can protect assets and still qualify for Medicaid to cover nursing home care. Start planning early, as options are limited once care is needed.
A Lesson on Paying for Eldercare Medicare, Medicaid and Long Term Care Insurance Explained
