Long-Term Care for 2023 and Beyond

As we draw an end to long-term care planning month, the team at APO Financial want to make sure you are fully prepared for the changes to come in 2023.

By definition, long-term care involves a variety of services designed to meet a person’s health or personal care needs during a short or long period of time. These services help people live as independently and safely as possible when they can no longer perform everyday activities on their own.

This – and every – October is Long-Term Care Planning Month, aimed to create awareness among senior citizens and their caretakers to understand and prepare for the outrageous costs of healthcare for adults. Let’s take a deeper look.

Rising Costs

Healthcare costs look to be trending upwards for 2023. A price jump that you may not be expecting, or potentially aren’t prepared for.

Alongside a general rise in goods and services stemming from inflation, healthcare costs (including Medicare) may rise due to a provision in the 2021 American Rescue Act (ARA) which removed the income cap for healthcare subsidies. This led to 13 million Americans receiving subsidized healthcare that otherwise wouldn’t have.

Approaching 2023, that provision will no longer apply, leaving millions to hunt for affordable healthcare in competitive marketplaces – something easier said than done.

What will these cost hikes look like? They may be as much as 50% higher, and will continue to outpace inflation and GDP – a recurring trend for years. This means that the cost to Americans in our home of Denver, Colorado – alongside you and your family – may be beyond the financial commitment prepared for.

Medicare Part A/B Considerations

From Denver, Colorado to Delaware and back, the cost of goods and services continue to rise. Medicare Part A costs, concerning hospital visits, surgery and other related services, are no exception in 2023. If admitted to the hospital, you can expect to pay a $1,600 deductible ($44 rise) and if hospitalized beyond 60 days (61st – 90th day) you can expect a $400/day ($11 rise) coinsurance amount. Other rises include an $800/day ($22 rise) coinsurance for lifetime reserve days and $200/day ($6.50 rise) in skilled nursing facilities for days 21 – 100.

Looking at Medicare Part B premiums there may be a silver lining amongst other price hikes. The Medicare Part B premium will be $164.90 in 2023, a decrease of $5.20. On top of this, the annual deductible for all Plan B beneficiaries will drop $7 to $226, down from $233.

Long-Term Considerations & Combatting Rising Costs

Rising costs are the enemy of financial planning, but proper considerations for the future can help mitigate these concerns. More than anything, ensure that you have a solid foundation to pull from. A diverse portfolio, with steady contributions to an IRA, a 401k, and savings will help. That being said, long-term care isn’t cheap. A 2017 study found that long-term care costs can total $172,000.

Other options include the Federal Long-Term Care Insurance Program (FLTCIP), something that federal and uniformed service employees in Denver, Colorado and beyond can take advantage of. If that doesn’t apply to you, an income annuity – a product that provides you with a fixed monthly income guaranteed for life – can be a great financial tool.

Long-term care insurance in particular stands out. By securing a policy with a fixed premium you negate the rising costs of home healthcare, hospice services, homemaker services, and personal care. Depending on your policy, most or all of these services can be included.

How APO Financial Can Help

APO Financial is where security and opportunity come together to work for you. Our team is devoted to staying one step ahead of financial concerns, and finding innovative ways to grow your financial assets.

With inflation and legislation affecting the cost of goods and services – including healthcare – now is the time to plan for you and your loved ones’ long-term care.

Schedule a complimentary call or meeting with us here today.

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Annuities can be an important part of an overall portfolio but may not be appropriate for everyone. Before purchasing an annuity, it is important to understand the details of the product. Certain products may not be available in your state. The terms of each indexed annuity varies. It is always important to speak to a financial professional. about an annuity’s features, benefits and fees, and whether an annuity is appropriate for you, based on your financial situation and objectives. Participation rates, cap rates and/or index spreads may be subject to change by the insurance company according to the annuity contract provisions. If the insurance company makes such changes, this could adversely affect the return. Guarantees of an indexed annuity are backed by the claims-paying ability of the underwriting insurance company. The surrender charge period for a product may be longer, and the surrender charges may be higher than other annuity products. Indexed annuities are long-term investments. If the annuity contract is surrendered early, there is the possibility of a surrender charge being imposed and/or the funds may be subject to income taxes. The IRS may also impose a 10% penalty on withdrawals prior to age 59 ½, depending on the circumstances. With indexed annuities, there is the potential to lose money, depending on the product charges and minimum guarantee contract provisions. For additional information on annuities, reference the following websites: The FINRA (www.FINRA.org), the Securities and Exchange Commission (www.SEC.gov), Insured Retirement Institute (www.irionline.org), the National Association of Insurance Commissioners (www.NAIC.org) or your state's insurance department.