Among the very risky assumptions individuals sometimes make when it comes to preparing for long-term care costs is just assuming that government benefits programs will help cover the costs of long-term care they may end up needing in their elderly years.
Now, while there are government programs out there that can help elderly individuals with health-care-related costs, it is no given that a given person's particular long-term care needs will have coverage under these programs.
For one, such programs can have many limitations in what they cover. For example, Medicare generally is incredibly limited when it comes to long-term care coverage. This program does not cover custodial care and will only cover nursing home expenses in very specific instances, and then only for a limited amount of time.
Medicaid is considerably wider in the types of long-term care it can be used to cover, but a person has to meet very strict rules in order to get long-term care benefits under this program. This illustrates another reason why just assuming government programs will cover one's long-term care costs can lead a person astray: there are all kinds of rules regarding who does, and who does not, qualify for benefits under these programs.
Thus, making assumptions about government programs and long-term care coverage could lead to a person making incorrect guesses regarding whether they would have coverage under these programs. This in turn could cause a person to not engage in long-term planning that could be helpful to them or to set up a long-term care plan that isn't well-suited for their actual situation. Thus, when thinking about potential future long-term care costs and how to handle them, it is very important for a person to not just guess on important issues like Medicare and Medicaid coverage, but to have the right information to make wise decisions. Individuals can go to experienced long-term-care planning attorneys for information on these issues.
Source: Forbes, "The 2 Big Misconceptions About Long-Term Care," Sudipto Banerjee, Feb. 2, 2016