What is Extended Care

Extended Care is something that most people overlook until its too late. In fact, it is rapidly becoming one of the most devastating financial problems for seniors. Extended Care coverage is often referred to as Long Term Care or Short Term Care. This is coverage for services such as home health care, assisted living facilities, and nursing homes. The reason it is having such a negative impact on seniors is that it is not covered under Original Medicare Part A or Part B. People often confuse Medicaid coverage for Extended Care as Medicare coverage or skilled nursing, which is a common misconception that can lead to financial ruin. It is clearly set forth in the Medicare and You booklet that this type of coverage is not provided under Original Medicare Part A and B and that you should properly plan for this type of care and the financial impacts it may have. If you fail to properly plan for this potential problem you may be in a situation that has a devastating impact on your retirement savings and assets. Covering the expenses related to Extended Care can be costly if you or your spouse are not properly prepared. The average costs for these services may vary on your location and the amount of care, but can easily be more than $5,000.00 a month. Since over 70% of seniors are in need of this type of care, it is something to strongly consider. When comparing the statistical likelihood of needing this type of coverage (70%) to common insurance products such as homeowners (7%) and auto (12%) you can see why these products makes sense. Just like Life Insurance, it is easier to health qualify and premiums are far less when planning at a younger age. Waiting till you retire to plan for this can not only be costly but you run the risk of not qualifying for these products. The good news is there are ways to plan for these potential problems if you consult with a professional experienced with these types of issues. Consulting with retirement planners and legal professionals is always recommended when properly planning your retirement and estate. However, insurance products can be a helpful tool in avoiding or reducing the risk of these financial pitfalls.