A frequent concern for upcoming retirees is how they can pay for long-term care health needs later in life. Long-term care insurance can be pricey, and you may never need it. So should you buy it? Before making this decision, be aware of your other options. Here are four ways to pay for long-term health care needs without insurance.
Pre-Pay For Care
One alternative to purchasing a traditional long-term care policy is to buy into a continuing care community. With these arrangements, you usually pay a decent-sized lump sum to reserve your spot, and then pay a monthly fee once you move in. Many of these communities are designed to be all-inclusive, meaning for your lump sum and monthly fee you will receive whatever level of medical care is needed. The idea is that you have pre-paid and fixed your costs.
There may be big tax breaks for buying into a retirement community that offers lifetime care benefits, but there are also risks. Some facilities have gotten into financial trouble, and the promises of lifetime care have not been met. Thoroughly review how to select a care community before you invest. And keep in mind this option can cost far more than a traditional long-term care policy.
As time passes, many of us will inevitably lose loved ones, but this should not stop us from forging new connections with people. For older adults, creating and fostering new relationships can drastically improve their quality of life and community living can help with this process.
When you choose this option, you may be amazed at some of the possibilities that become available. You can choose to live together with friends or family in a place of your choice and pay for the services you need, such as cleaning, cooking, and even a visiting nurse if needed. Cost-sharing can allow you to maintain control and live in an environment of your choice while sharing life experiences with old friends or new ones.
Plan Ahead With Family
If your family is the kind that always takes care of its own, then you should openly discuss long-term care arrangements. You must have authentic discussions on what this means and if it would work for all of you. If it would, discuss the financial arrangements and make sure everyone knows what their role will be.
Perhaps you can pay for an addition to a family member’s home as an area you will eventually move into. Maybe your family member can add-on a guest house or attached living quarters that can be rented out until you will live there. Remember that you may also need in-home medical care later in life, so you want to have funds set aside to cover this. You also want to be sure your future living place is accessible.
If you pay for the additions to the home and it is rented out, the rental income could be set aside to help offset any in-home medical care needed later. Any arrangement that works for both you and your family can be discussed.
Medical tourism is on the rise. Many Americans head overseas for various surgical procedures, but you could consider life overseas as a permanent solution to your long-term care needs. In some cases, the affordability of the care options outweigh the cons of making it happen logistically. Outside of the affordability, the culture in some countries may be more conducive for older individuals who need more hands-on care. This is especially true in countries like Japan and China, where they emphasize respecting and giving special care to older people in the community. In fact, many view it as an obligation.
And for those who are terminally ill, there are countries (and now some U.S. states) that allow you greater choice in how your last months of life occur. For some, this may be an important factor for where you go for long-term care services. Palliative care—which is an approach that aims to provide comfort and improve the quality of life for people nearing death—is most emphasized in the United Kingdom, where it is integrated into their health systems. New Hampshire, Vermont, Rhode Island, and Delaware lead the way for best palliative care in the U.S.