In a USA Today article (“5 ways to prepare for long-term care costs,” October 2014), the U.S. Department of Health & Human Services estimated that, on average, almost 70% of 65-year-olds will need some kind of long-term care—whether it be 24-hour supervision or a caregiver assisting with specific tasks.


Given this likelihood, it is important that you know your options. Assisted-living facilities, nursing homes and in-home caregivers all constitute long-term care. Next, consider your costs, which can vary greatly depending on both the type of care you need and where you live. Understanding the differences between Medicare and Medicaid is also important.


TIAA-CREF can help you plan for long-term care.


Today, long-term care insurance policies typically cover both in-home care and nursing homes. However, many older policies did not include in-home care coverage. It is important that you are familiar with the terms of your policy. Generally, benefits are triggered when the insured can no longer perform daily personal care tasks—such as bathing, using the bathroom or eating—for a specific period of time. The insurance benefit is usually expressed as a daily dollar amount, and most policies have a maximum benefit amount.


Medicare Part A covers periodic or part-time, medically necessary care provided by a Medicare-certified nurse and supervised by a doctor. Rehabilitation centers meet the requirements for such coverage. Some in-home healthcare is also covered by Medicare Part B.


Medicaid rules differ state to state. Generally, you must spend down your available resources before applying for Medicaid benefits. Your financial records for the past five years will be examined. If you are married, your spouse is also subject to the spend-down requirements. The amount of combined savings a spouse is allowed to keep will vary by state. States also differ quite a bit in how they treat home equity.

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This material is for informational purposes only and the statements made above represent TIAA-CREF's interpretation of applicable law. It is presented with the understanding that TIAA-CREF (or its affiliates, distributors, employees, representatives and/or insurance agents) is not engaged in rendering legal or tax advice.