The healthcare needs that we will develop as we near the end of our lives will be different from person to person. Some of us will age gracefully into our senior years and be fortunate to enjoy relatively good health. Others among us will deal with illness that can challenge us physically, emotionally, and financially. And while family history may give us some insight as to what health conditions we may anticipate in our future, the fact is that no one ever knows exactly when we may find ourselves facing a life-altering medical diagnosis. There are many variables and unknowns that can change our end-of-life options for healthcare. One person may be looking at a long struggle with the increasing symptoms of Alzheimer’s disease and another person may be diagnosed with a serious illness that will require palliative or hospice care planning.  As we cannot know with certainty what lies ahead, the best thing we can do for ourselves, and our loved ones, is to financially prepare in advance so that we will have the resources available to meet our end-of-life care needs.

 

What are the healthcare costs you need to consider when you are end-of-life planning?

Care at the end of life can be costly, and the expenses that you will face can vary greatly depending on the level of assistance you require, the setting that is most suitable for your needs, and the types of treatments that you will receive. You may be able to live in your home with a family member or hired aide to help you, or you may require more specialized nursing care at the end of life which would be provided in a facility. Prices can be very high. According to the most recent Genworth Cost of Care Survey, in the New York area home health aide services provided in home average at $6,483 per month. Assisted living facilities cost approximately $6,500 each month, and a stay in a semi-private room in a nursing home averages $12,471 each month.

Health care planning for your end-of-life needs should consider the following potential costs:

  • Hospital care. Acute care and intensive interventions may require lengthy hospitalizations.
  • Palliative and hospice care. These are services that provide comfort and pain management. They may be given in a facility or in a patient’s home.
  • In-home care, nursing home care, or assisted living facilities. Long-term care at the end of life may be started in one setting and as needs change, be transferred to another location. Each will come with associated costs.
  • Prescription drugs and therapies. Pain management medications and ongoing care treatments can be costly.
  • Out-of-pocket expenses. Medicare or private insurance may cover a large portion; however patients may still incur out-of-pocket costs for a variety of things like copays, deductibles, medications, home care, transportation and other services. These expenses can add up quickly.

 

How can you pay for health care at the end of life?

Most Americans who are 65 and older have Medicare for their health insurance. There are also Medicare Advantage plans private insurance plans, Medicaid, and long-term care insurance policies that each have their own rules and limits regarding coverage.

  • Medicare will cover inpatient hospital care, but when you are dealing with a serious illness that may require long-term hospitalization, costs can add up. For instance, after you have met the Medicare Part A deductible (of each benefit period) of $1,676 in 2025, if you are hospitalized for longer than 60 days, on day 61 you will then be responsible to pay $419 each day. If your hospitalization extends to day 91, costs can go even higher.
    • Medicare may also cover medically necessary stays in a skilled nursing facility (SNF), but it is only if a patient has a medical need to be there, such as requiring sterile dressing changes. Activities of daily living (ADLs), like bathing, eating, dressing and using the bathroom can safely be done at home with the assistance of a family member or personal care aide, so they are not considered a covered reason to be in a skilled nursing facility.
    • Medicare Part B will cover a limited amount of drugs, but they are the types you typically would not take at home. For additional drug coverage, you would need to have a separate Medicare Part D drug coverage from a Medicare-approved private plan. Medicare Part A and/or Part B will cover some home health services when certain criteria are met, but patients will not qualify for the home health benefit if they need more than part-time or intermittent skilled care.
    • Under specific conditions, Medicare will pay for hospice care. However, it’s important to discuss your individual circumstances with care providers who can fully explain what may or may not be covered by insurance.
  • Medicaid. This is a joint federal and state program that is individually run by states, with each state deciding on eligibility criteria, coverage groups, and services. Medicaid can pay long-term nursing care costs and many home health care expenses that are not covered by Medicare. People with Medicaid typically don’t pay anything for covered medical expenses but may owe a small co-payment for some items or services. However, there are strict guidelines and income limits that an individual must be below to qualify for Medicaid. A financial advisor can work with you to analyze your financial situation and help you determine if there is a suitable path for you to be able to enroll in this program.
  • Private insurance. If you have private insurance, you can review your policy or speak with your plan administrator to determine the coverage you have for end-of-life care. This may include hospitalizations, prescription drugs, palliative care, and hospice care.
  • Long-term care insurance. Coverages and costs of these policies vary, but this insurance may help to cover home health care expenses, respite care, adult day care, assisted living communities, nursing homes, and memory care.
  • Veteran benefits. There are geriatric, extended care, and hospice care benefits available to U.S. veterans.

 

A financial advisor can help with end-of-life planning, including addressing your healthcare needs.

There are so many things to consider when you start to address care at the end of life. You want to ensure that you will receive the highest quality of care possible, from providers you are comfortable with, and in settings that are most suitable for your needs. Costs can mount quickly and when you are under pressure to make healthcare decisions, the last thing you want to be concerned about is being able to afford them.

A financial advisor who is experienced in end-of-life planning can be your greatest ally as you plan for your future needs. They can review your specific situation and develop financial strategies that can maximize your ability to pay for your medical expenses.

There are several ways your financial advisor can help you:

  • Estate Planning. Your financial advisor can help you create an estate plan or review the documents you may already have. They can ensure that you have a healthcare proxy and living will in place so that your wishes regarding your medical care will be respected.
  • Your financial advisor may recommend that you include certain trusts as part of your estate plan. Depending on your personal circumstances, and how far in advance you are able to plan for your healthcare, this may help you to meet the financial thresholds to qualify for Medicaid.
  • Review your insurance policies. Your advisor can help you understand your various policies’ limits and explain any gaps in coverage that you may need to financially plan for.
  • Make recommendations. Whether adding long-term care insurance or establishing savings that will be designated for healthcare costs would be beneficial to you, your financial advisor can help you to look at all of your options and create a plan that will meet your needs.
  • Give you peace of mind. Even if you are planning for your end-of-life care needs well in advance, just thinking about it can be emotional and frustrating. If you are suddenly dealing with a new medical diagnosis, it can be even more difficult. By enlisting the help of a financial advisor who is experienced in end-of-life planning, you can rely on their expertise to guide you in the right direction and remove the burden of trying to do this alone.

 

Throughout our lives, we become accustomed to dealing with health insurance premiums, copays, deductibles, and the expenses that we may encounter as we pay for the cost of meeting our healthcare needs. In the context of end-of-life planning, this is an undertaking that becomes much more complex. With the guidance of a financial advisor, you can create a plan that alleviates financial uncertainty so that you can spend your days focused on what truly matters to you. If you would like more information, please contact us.