The average cost of a private room in a nursing home is around $250 a day or roughly $90,000 a year. Although sound long-term care coverage — offered by about 40% of employers, statistics show — would help defray these costs, many investors instead are thinking about “Medicaid planning.”

A Nationwide Financial survey finds that 42% of advisers have clients who are asking about giving away all of their money to their children as a means of financial planning. Once they have few assets, such clients may qualify for government assistance in paying for their long-term care.

“Medicaid can be an extremely helpful option for those who need it,” says John Carter, president of Nationwide Financial Distributors, yet warns that, “People who resort to repositioning or giving away money often find they sacrifice control.” For example, the nursing home a certain retiree would choose may not accept people on Medicaid. In addition, Medicaid patients do not get private rooms, according to Carter. “If they are unhappy with the facility, they may have limited ability to change.”

Carter also notes that “services such as assisted living, home health care or adult day care are not a typical option for those relying on Medicaid.” What does cover those types of services? Long-term care insurance.

However, employers have their work cut out for them in effectively communicating LTC. Statistics from a 2010 Harris Interactive poll show that more than 90% of consumers had not spoken with a financial adviser, their spouse or any other family member about long-term care planning at all, let alone about purchasing LTC coverage.

Donald Jay Korn writes for Financial Planning, a SourceMedia publication.

Register or login for access to this item and much more

All Employee Benefit News content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access