How Can You Pay for LTC? There are three ways to pay for LTC: 1. Out of assets or income There are many problems with this strategy. You need to be rich to afford the costs. Even then, it puts you at risk of exhausting your funds. It puts your spouse at risk if there is not enough for both of you. It reduces what you can leave to your heirs. 2. Medicaid Medicaid is a government welfare program that pays LTC expenses for poor people. If you are poor, this is your best option. There are many downsides to Medicaid. Medicaid funded LTC is harder to find and usually of inferior quality. It leaves you at the mercy of both the federal and your state governments, which constantly change Medicaid rules on eligibility, reimbursements, etc. Both spouses must be impoverished before Medicaid will pay. Medicaid does not pay for care in assisted living facilities and offers limited benefits for home care. 3. Long Term Care Insurance This is clearly the better solution. Long-term care insurance leaves you in charge, not dependent on the government or your relatives.  It protects your assets, provides immediate protection, stretches your savings and protects your spouse. LTC insurance reimburses for care at home and assisted living facilities, both of which are preferable to nursing homes. It insures that a nursing home will accept you and allows you to choose a higher level of payments for more luxurious care. Long-term care insurance policies have paid over $10 billion in benefits, including $2.8 billion in 2003. 1 LTC insurance is affordable for people who choose the correct policy and benefits. Buying the policy substitutes a regular, small payment for the risk of a very large, unexpected payment. 1. National Association of Insurance Commissioners, LTC Report, September 2004. Copyright 2005 Arthur Stein. All Rights Reserved. No reproduction without permission. Contact astein@ltcguide.com