How will I pay for Long Term Care in California?

James Zakasky
An estate attorney who goes beyond drafting wills and creating trusts

How will I pay for Long Term Care in California?

Long Term Care Insurance – If you start coverage early and lock in a good rate this can be an excellent option. Long Term Care Insurance is tax deductible and can even be a benefit you provide to employees with the same tax deduction. Make sure to check what your daily payout will be. I have seen some plans that only pay $150.00 per day. That’s a drop in the bucket compared to At Home 24-hour cost of care at $630.00 per day.

Life Insurance – A Life Insurance Policy that has a Death Benefit Rider will allow the insured to take the full amount of the Policy and use it for care. The Policies with this type of Rider are very specific and need to be examined carefully with Long Term Care Planning.

Veterans Benefits – Veterans can take advantage of many VA programs for a skilled facility or at home care services. There are restrictions. If you have a Home, it will be excluded but if you have extensive retirement accounts that could knock you out of the program.

Consider Selling or Renting if you Own Your Home – With the high price of Real Estate in California many could use this Equity to pay for their care. It may be a bitter pill that many do not want to swallow and renting the house could be an excellent way to keep the asset and pay for the care.

Reverse mortgage proceeds are commonly used to pay for home care, assisted living / nursing home care (for one spouse), home modifications to allow aging in place, and even to purchase long term care insurance. A very general rule of thumb is that seniors can borrow a maximum of approximately 70% of their home's value.

Bridge Loan – a riskier option, that allows you to receive a loan now to pay for Assisted Living while you wait for your house to sell and then pay back the loan with the proceeds of the sale. Yes, very risky.

Private Pay – Simple use up all your funds to pay for the Assisted Living then hopefully qualify for some type of Government Assistance.

Annuity – A good Annuity policy will give assistance with little or no penalty for a withdrawal for Assisted Living.

Medicaid – A great option if you meet the strict financial guidelines. Bottom line is that your Health Costs Exceed your income and or available income.