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By John R. Merlino Jr. Esq.
Founding Attorney

Inflation has touched just about every aspect of life. Gas prices, rent, and food costs have soared in the wake of the COVID-19 pandemic and the war in Ukraine. Over the past 12 months, inflation has increased by 8.6%, the highest level since December 1981.

The trend is expected to continue, despite efforts to rein in inflation through a historic increase in interest rates. Some economists expect unemployment to rise, and the possibility of a recession is very real.

What does the increase in inflation mean for my long-term care plan?

Inflation touches all aspects of products and services, including medical care. If you have a long-term care policy, it’s essential to review your policy to determine whether you have enough coverage.

Long-term care plans provide seniors with coverage should an accident or illness require them to get help from a non-family medical provider. The most common type of long-term care includes services from a visiting home health aide. Aides can help individuals with everyday activities like cooking, grooming, taking medications, and general movement.

In some cases, more extensive help may be required to support an individual with serious injuries or illnesses. Long-term care can include stays at an assisted living facility or a nursing home. Living in a medical facility can provide seniors with the on-site help they need and additional medical assistance if a condition takes a turn for the worse.

How do I know if I have enough coverage for long-term care?

Review the policy to determine whether you have enough coverage. Determine what your policy includes and how much it will pay for each long-term care type. Every long-term care policy is different. Some will provide a percentage of care up to a capped amount, while others have a per-day allowance.

In addition to policy caps for long-term care, there may be limits on the number of days that your policy will cover if you need to use it. Take the details of your long-term care policy under careful consideration, along with your retirement savings.

Some individuals are able to supplement the costs of long-term care with their retirement savings and investments, while others will need to rely more on the coverage they obtain from their policy. If you know your retirement savings are limited, you’ll want more coverage from your long-term care policy.

A good rule of thumb is to obtain estimated costs of local nursing homes, assisted living facilities, and at-home care providers. Knowing the current prices can help you determine whether your coverage is reasonable or if you will need more financial assistance.

What can I do besides increase my long-term care coverage?

Many long-term care plans offer protection for inflation through a rider that can be purchased for an additional fee. An inflation rider is recommended for individuals who buy their policies in their 50s and 60s. Many individuals don’t need long-term care immediately upon retirement, and it may be a decade or so before they need the assistance.

Additional coverage may be the solution for individuals already in the later stages of life. Of course, you can always combine an inflation rider and more coverage for optimal peace of mind.

Need help with your long-term care policy?

At Merlino & Gonzalez in Staten Island, NY, our attorneys are experienced in real estate and elder law. We can help you determine whether you have the long-term care policy that is right for you or if additional coverage is warranted. Contact us to schedule a consultation and find out more.

About the Author
John is a fierce advocate and the office guru for problem-solving and brainstorming. He guides clients through every stage of a real estate transaction from offer to contract, navigating through nerve-shattering home inspection and title clearance concerns, maintaining constant contact with lenders, conducting the actual closing, and continuing to advise clients with regard to any post-closing concerns.  John brings a practical and fair-minded approach to the process which has earned him the respect of his clients and peers.