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If you are new to Medicare or plan to enroll in the near future, it is imperative that you understand how the program works and how much it costs. For example, some people mistakenly believe that Medicare is free, while only Part A, which covers hospital care, does not charge participants a premium.
Not only health insurance do not free, but your retirement health costs may become much more substantial than you think because of the number of services that Medicare does not cover. For example, Medicare does not support dental exams, vision services and hearing aids. But if there is a major expense not covered by Medicare, you really need to be careful, this is nothing more than long-term care.
What will cost you long-term care?
Many people assume that Medicare will cover the cost of retirement homes or assisted living centers, but this will not be the case. Although the program pays for a limited stay in a specialized nursing facility, it will only do so if your medical condition should improve and is related to a medical problem or injury.
However, Medicare will not pay for what is called child care – the help you need to function. For example, many people end up in retirement homes or assisted living centers not because they are sick or injured, but because their bodies no longer work as before and therefore their mobility is limited . That's where long-term care comes in, and it's an expense that you will usually face without any help from Medicare.
Unfortunately, this can be astronomical. The average annual cost of a assisted living center is $ 48,000 nationally, according to the Genworth Survey of Cost of Care done in 2018. Meanwhile, the average cost of a shared room in a Retirement home is $ 89,297 a year. And for a private retirement home room, that's $ 100,375.
Home helpers, which Medicare will not cover either if they are needed for childcare purposes, can also be a fortune. The average annual cost of a full-time home health aide is $ 50,336.
That is why it is essential to plan the huge expenses that long term care represents. Although it is impossible to predict if you will need this care or how much better it is to be safe than sorry, especially since Medicare can not save you.
Planning for long-term care
If the idea of paying for long-term care is enough to get your stress level through the roof, it is imperative that you develop a plan to meet that need. Your best bet in this regard is to take out a long term care insurance policy, and the best time to buy one is in your mid-fifties. At this age, you are not only more likely to be approved, but you can also benefit from a health discount on your premiums, thus making your policy more affordable.
At the same time, it pays to increase your savings in order to have sufficient funds to cover long-term care. In this regard, you have several options. You can increase your contributions to your general retirement savings plan, be it an IRA or a 401 (k), or fund a health savings account (HSA). The latter depends on eligibility – to be eligible, you must have a high deductible health insurance plan and meet other requirements. But if you make enough savings in an HSA, you will have a source of funds dedicated to retirement health care expenses, including long term care.
Although Medicare provides a host of health benefits essential for seniors, it will not pay the bill for long-term care. Planning this expense could save you a world of financial stress and upheaval if the need makes you feel at any time of your golden age.
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