Many people who need long-term care will also need prescription drugs. There are programs that may offer you discounts or free medication.

For more information

This type of trust is set up by the beneficiary and is not a government program. There are two types of Medicaid Disability Trusts that don’t need to meet the rules regarding trusts and Medicaid eligibility. They include:

1. A parent, grandparent, or legal guardian can establish a trust for a disabled person under the age 65, and
2. A non-profit association keeps a separate account for each beneficiary.

With either type of trust, if you get Medicaid benefits, the state will get their money when you die.

Listed below are some opportunities and requirements/limits for Medicare Disability Trusts:

Usually you need a lot of money to set up a charitable remainder trust. You can set up this trust through accumulated assets over your lifetime of working and investing. The charitable remainder trust will allow you to receive an income for life or a specified period of time based on a percentage of assets in the trust. When you die, the charity will get the remainder of the trust. Additionally, if you give specific types of assets to a public charity at fair market value, you will get a tax deduction based on the market value of the amount, avoid paying a capital gains tax on any appreciated assets you donate, and may save on estate taxes.

Listed below are some opportunities and requirements/limits for charitable remainder trusts:

Deferred Annuity and Immediate AnnuityThe deferred annuity has two funds:

1. A long-term care fund that can directly pay for long-term care services or pay for long-term care insurance. This fund may grow at a high interest rate.
2. A regular cash fund that grows at a guaranteed rate of three percent.

To be eligible for this annuity you have to be under age 85 and answer a few questions about your current health condition. There are some conditions when you can’t get this type of annuity (for example, if you have dementia or Parkinson’s disease). If you are eligible, your long-term care coverage can start after the seven-day waiting period.

The monthly long-term care benefit payout depends on the deferred annuity value. Most deferred annuities provide coverage for up to 36 months. You may be able to buy additional months of coverage for an extra cost.

Listed below are some opportunities and requirements/limits for deferred annuities:

An immediate annuity is for people who can’t get insurance because of health conditions (for example, dementia or Parkinson’s disease). You can also get an immediate annuity if you are already getting long-term care.

Usually with this type of annuity, medical underwriting is used. You usually must answer medical questions on an application. You need to fill out this application carefully and completely or your annuity could be invalid. Some insurance companies may want to review your medical record before they give you this type of annuity. The insurance company can use this information to decide how much to charge you (your premium) and what the payout schedule will be for this type of annuity.

If you qualify, a single premium payment is converted (changed) to a guaranteed monthly income. You will get this monthly income for the rest of your life.

Listed below are some opportunities and requirements/limits for immediate annuities:

You can use your savings or other personal resources to pay for long-term care. This is also called “self-insuring”. Some personal resources may include money in a checking or savings account, stocks, bonds, investments, life insurance policies, pensions, and income. Your family may also want to give you money towards your long-term care needs. If you choose this option, you should plan ahead before you need long-term care. Make sure you think about all your future health care needs and costs.

Long-term care is very expensive. This option may only be practical for people with above average resources.

Listed below are some opportunities and requirements/limits for self-insurance/personal savings plan:

Continuing Care Retirement Communities (CCRCs) provide housing, health care, and social services. In the same community, there may be individual homes or apartments, an assisted living facility, and a nursing home. Where you live depends on the level of care you need.

Continuing-Care Retirement Communities are the most expensive long-term-care solution. The monthly maintenance fee usually ranges from $650 to $3,500 and may be increased from year to year as inflation dictates. In addition to the monthly payments, there are buy-in, or entrance, fees that range from $38,000 to $400,000. The fees vary according to whether the resident owns or rents the living space; the size and location of the residence; amenities chosen; whether the living space is for one or two individuals; the type of service plan chosen; and the current risk for needing intensive long-term care. Some CCRCs offer a “life care contract.” This means, if you need care in the assisted living facility or in the nursing home, then you are guaranteed to pay the same entry fee and monthly fee as someone who lives in an individual home or apartment.

Some CCRCs are “self-insured” and others purchase a group long-term care insurance policy. These policies are used to pay the additional care costs of its residents if long-term care services are needed.

To find out if a CCRC is accredited and to get advice on selecting this type of long-term care, you can look at the Commission on Accreditation of Rehabilitation Facilities website.

Listed below are some opportunities and requirements/limits for CCRCs:

Selling your home gives you many options. This allows you to move anywhere you want to. You may want to buy a smaller home, condo, or move a retirement community. If you sell your home and have any money left over, you can buy investments to continue your income. You may also want to use the money you have left over to pay for your long-term care needs or to buy a long-term care insurance policy.

Listed below are some opportunities and requirements/limits for selling your home and moving:

If you choose to get a reverse mortgage, at the same time, you can buy a reverse annuity using your reverse mortgage money. This has the same requirements as a reverse mortgage. When you sell your home, no longer live in your home permanently, or when you die, you or your estate will have to repay the money back that you got from the reverse annuity mortgage. You will also have to repay any interest and other fees.

Listed below are some opportunities and requirements/limits about reverse annuity mortgages:

A reverse mortgage is a special type of home loan that lets a homeowner convert a portion of the equity in his or her home into cash. The equity built up over years of home mortgage payments can be paid to you. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower(s) no longer use the home as their principal residence. HUD’s reverse mortgage provides these benefits, and it is federally-insured as well. To obtain a HUD-insured reverse mortgage you must be 62 years of age or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home.

For more information about a reverse mortgage, visit the U.S. Department of Housing and Urban Development.

To evaluate whether a reverse mortgage is right for you, and the amount of money that you might receive by using a reverse mortgage, visit the American Association of Retired Persons (AARP).

Listed below are some of the opportunities and requirements/limits about home equity conversions:

* In the HECM program, a borrower can’t be forced to sell the home to pay off the mortgage, even if the mortgage balance is more than the value of the property. A HECM loan doesn’t need to be repaid until the borrower moves, sells, or dies. When the loan must be paid, if it exceeds the value of the property, the borrower (or the heirs) will owe no more than the value of the property. Federal Housing Administration (FHA) insurance will cover any balance due to the lender.

If you are *terminally ill or chronically ill, you might be able to sell your life insurance policy to another person (a third party). You usually have to sell your life insurance policy for a lower amount of the full face value. The amount that is paid is usually based on the remaining life expectancy of the insured (you). The death benefit usually ranges from 50 percent to 80 percent. When you die, the third party will get the full death benefit.

Before making a final decision to make a viatical settlement to pay for your long-term care needs, you may want to contact your State Attorney General Office or your State Department of Insurance.

Listed below are some opportunities and requirements/limits for viatical settlements:

*The definition of a terminal illness may vary among insurers, providers, and states.