How long-term care insurance can reduce the cost of home health aides

A long-term care insurance policy can help you reduce the cost of home health aids later in life.

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The most Americans age 65 or older — or about 70% — will need long-term care services at some point in their lives. But that doesn’t mean most Americans will find themselves in one nursing home or assisted living community. There are care options for those who want to grow old in placetoo.

One of the most expensive aspects of aging in place may be the need for a home health aide. However, if you make smart financial decisions before it becomes a necessity, you can reduce the cost of your home health care services. And, long-term care insurance can help.

Find the right long-term care insurance policy to reduce home health aide costs.

How long-term care insurance can reduce the cost of home health aides

Home health aides can be expensive. According to the Genworth care cost survey, the annual cost of a home health aide could grow to $69,529 by the year 2025. So, does long-term care insurance cover this cost?

“Long-term care insurance generally covers home health aides, but only under specific requirements,” says Joseph Fresard, senior law and estate planning attorney at Simasko Law.

However, that does not mean that all policies will offer this coverage. “You should check the policy to see if it covers home health aids and if so, what conditions there might be” before you buy coverage, Fresard says.

So, as long as you choose a policy that offers home health aide coverage, you can usually use it to reduce the cost of a home health aide. That usually works in one of two ways:

Long-term care insurance can cover the full cost of a home health aide

A way to use long-term care insurance to reduce the cost of a home health aide is to purchase enough coverage to cover the full cost. To do this, it can help estimate when you might need a home health aide. You can then use the average cost of care data to determine the cost estimate for home health aides in the year you may need one.

It may also help to plan for several years of coverage. For example, if you find that your home health aide may cost $70,000 per year, you may benefit from purchasing $210,000 in long-term care insurance — or three times your expected annual cost of care.

Explore your long-term care insurance policy options online today.

Long-term care insurance can also provide additional coverage

As with most types of insurance, Long-term care insurance is becoming more expensive as the cost of coverage increasing. For example, you will likely pay a higher premium for a $250,000 policy than a $150,000 policy. So, premiums may be too high if you plan to cover 100 percent of your home health aide expenses with long-term care insurance.

However, there is a way to reduce costs.

Instead of relying on long-term care insurance for 100% of your home health aide expenses, consider using the policy as a supplemental resource instead. For example, you may have booked some higher health care costs as part of your retirement plan. Let’s say you expect to spend $25,000 per year in increased health care costs.

You probably won’t need more long-term care insurance coverage when you consider the $25,000 per year you’ve already saved. For example, if you determine your home health aide costs will be $70,000 per year, you may only need about $45,000 per year in coverage — which could lead to a significant reduction in your premiums.

Other ways long-term care insurance can help you age in place

Whether or not you need a home health aide, long-term care insurance can make it easier to age in place instead of moving into a nursing home or assisted living community. Here are some ways this type of coverage can help:

  • Home renovation: As you get older, you may develop conditions that make your home more accessible. Long-term care insurance may cover the cost of repairs to improve accessibility. For example, your coverage may pay for installing handles in your shower or a ramp at your front door.
  • Family caregivers: May be your policy offer compensation to your family for providing your care. If you plan to rely on your family for your care, make sure your insurance policy covers formal and informal caregivers.
  • equipment: Long-term care insurance can help cover the cost of equipment not covered by another policy. For example, your coverage may pay for traction devices or stair lifts if these types of devices become a medical necessity.

Get long-term care insurance to help you age in place today.

The bottom line

Home health aides can be expensive, but if you act before you need them, you may not have to foot the bill alone. Many long-term care insurance policies help to cover the cost of home health aids as well as other costs associated with aging in place. By purchasing a long-term care insurance policy now, you can be better prepared to pay the cost of your care later.

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