Planning ahead is essential when it comes to unexpected future expenses. This is especially true when considering the potential need for long-term care for military servicemembers and their spouses. In this piece, we'll explore the various sources of long-term care funding available to military-affiliated patients.
These include Veterans Affairs (VA) benefits, long-term care insurance, Medicaid, and self-pay. Each option should be weighed carefully, and your choice may depend on your qualifications and the services needed. Notably, TRICARE does not cover long-term care expenses, and Medicare provides limited coverage. That’s why a comprehensive financial plan is essential to navigate these options and ensure adequate support when you need it most.
How to Plan for Long-Term Care
When planning long-term care for servicemembers, the following steps can be helpful in guiding you through the process.
Understand Military Benefits
Familiarize yourself with the long-term care benefits available to military servicemembers. The VA offers various programs and services, including long-term care options for eligible Veterans. We’ll discuss those in more detail later.
Create a Financial Plan
Assess your financial situation and develop a plan to cover potential long-term care costs. Remember to consider factors such as retirement savings, investments, and other assets. Take some time to explore long-term care insurance options.
Legal and Estate Planning
Make sure you create or update all your legal documents, such as a durable power of attorney, healthcare proxy, and living will. It may be worthwhile to consult with an attorney to ensure your wishes are documented and can be carried out if you’re unable to make decisions for yourself.
Educate Family Members
Your family should be made aware of your long-term care plans and preferences. At some point, sit down with them to discuss financial arrangements, legal documents, and any specific wishes you may have regarding your care.
Stay Informed on Policy Changes
Keep up-to-date with changes in military and Veterans' benefits, healthcare policies, and long-term care programs. Being informed allows you to adapt your plan accordingly.
Long-Term Care Options for Servicemembers
Let’s take a look at the most common long-term care options available to servicemembers, Veterans, and their families.
VA Benefits for Long-Term Care
Navigating long-term care options from the VA can feel complicated; there are many options to go through. Long-term care services provided by the VA include comfort care, physical therapy, around-the-clock nursing or medical care, caregiver support, and daily task assistance. These services, however, are accessible only if a VA plan covers you and your VA medical team deems them necessary.
The availability of VA long-term care is contingent on your local infrastructure. Adequate space in nearby facilities or qualified service providers in your area will play a role in determining the feasibility of accessing these services. Popular venues for care include Community Living Centers operated by the VA, non-VA community nursing homes, and state Veterans’ homes.
Key to the provision of VA long-term care is your service-related disability status. While certain benefits do not mandate a specific percentage of disability, they may have income and asset limits. If you qualify for VA benefits based on your service history, it’s imperative to exhaust these resources before considering Medicaid as an alternative.
Long-Term Care Insurance
Private and military-related long-term care insurance policies often come with a hefty price tag, making coverage a substantial financial commitment. Elevated usage has recently led to the consolidation or closure of several insurance companies.
In 2022, the average premium for private long-term care insurance was $216.66 per month for a 60-year-old couple, reflecting the financial strain associated with securing adequate coverage. This fact underscores the importance of strategic planning and informed decision-making when considering long-term care insurance options.
Military employees, retirees, and their spouses have a potential avenue for long-term care insurance through the Federal Long-Term Care Insurance Program (FLTCIP). This government-sponsored program offers an alternative for those associated with the military, providing access to benefits that can significantly aid in managing the costs of long-term care. Notably, qualified relatives, including domestic partners, parents, parents-in-law, and adult children, can also apply for coverage under the FLTCIP, broadening the scope of support within military families. Effective Dec. 2022, new enrollment in FLTCIP is suspended. Current participants are also receiving notice of increased premiums and/or reduction of benefits.
Self-Pay
For individuals who don’t meet the eligibility criteria for Medicaid and lack access to VA benefits or long-term care insurance, self-pay becomes a potential avenue to fund long-term care needs. Utilizing personal savings to cover the costs of long-term care services is a common strategy. However, this approach can pose a significant challenge and disrupt your regular financial plan or retirement savings.
Choosing to self-pay for long-term care is a decision that requires careful consideration of the financial implications, especially if there is a substantial need for extensive care. The expenses associated with long-term care can impact both short-term financial stability and long-term retirement goals. Individuals and their families must weigh the trade-offs and develop a well-thought-out financial strategy to navigate the complexities of self-funded long-term care.
AAFMAA Long-Term Care Settlement Option
In addition to traditional payment methods for long-term care, such as personal savings and investments, individuals may leverage accelerated death benefits offered in specific life insurance policies. A notable example is the Long Term Care Settlement Option (LTCSO) provided by AAFMAA.
Every AAFMAA whole-life policy and Wealth Builder policy incorporates the LTCSO without an additional cost. This unique feature empowers AAFMAA policyholders with the flexibility to convert the death benefit, typically payable only upon the insured's death, into regular periodic payments. These payments are specifically designed to cover the expenses associated with nursing home care, custodial services, or home health care for the insured.
The inclusion of the LTCSO in AAFMAA policies reflects a commitment to offering comprehensive solutions that address the evolving needs of policyholders.
Get the Support You Deserve with AAFMAA
Since 1879, AAFMAA has been serving those who serve our nation. We can help servicemembers plan for long-term care expenses, including accessing life insurance benefits and so much more.
Contact us or visit our AAFMAA Member benefits page today to find out what we can do for you and your financial future.
This article was originally published May 27, 2022.