Understanding Your Healthcare Options
Seniors today face myriad choices when planning for their future healthcare needs. The rising cost of medical care in this country—especially long-term care—has made understanding the options and their cost implications an important step in your planning process. But what type of plan is best?
THE VALUE OF LIFE CARE
Life Care provides seniors with a means of safeguarding their assets and securing future long-term healthcare they may need, while experiencing an all-inclusive, maintenance-free lifestyle. Life Care is a product available only at continuing care retirement communities—like Pennswood Village—that offer independent living, personal care and skilled care all under one roof.
Life Care is an option to all seniors, regardless of whether they have long-term care insurance. The only stipulation is that a resident entering Pennswood Village must be able to live independently. Unlike long-term care insurance, costs for Life Care are not tied to a senior’s age.
If a resident already holds a long-term care insurance policy, he or she may be eligible to receive benefits directly if nursing care is needed, thus eliminating fees that may be associated with long-term care. A policy will most likely work with the community’s Life Care program and pay earned benefits directly to the resident.
Due to a landmark 2004 court decision1, federal income tax deductions are possible on amounts that exceed 7.5% of adjusted gross income for the first year’s portion of a community’s entrance fee. These deductions also extend to the monthly service fee on an ongoing basis, year after year. The deductions are taken as prepaid medical expenses.
In 2018 Pennswood Village residents were able to deduct up to $20,176 per person for medical expenses on their tax return. In addition, new residents could deduct up to an additional $33,000 per person for the portion of their entrance fee that is estimated to be for prepaid healthcare (subject to IRS limitations and guidelines).
A Life Care contract guarantees that all required healthcare—from personal care through long-term nursing care—remains available at Pennswood Village. This is an important consideration for couples when a spouse or partner becomes ill or is injured and requires a higher level of care. With Life Care, couples can continue to live in the same community, although in different residences.
How Does a Life Care Contract Work?
Life Care contracts are a means of managing risk for both Pennswood and the resident. They are the most secure long-term care insurance policies available, and do not carry many of the medical condition restrictions. A full contract pays for long-term care for the resident’s lifetime, regardless of the amount or duration of the care.
An important advantage to living in a Life Care community is that the transition from one level of care to another occurs on the same campus, avoiding a life-disruption move in order to obtain a different level of care.
The Advantages of Life Care
- Makes good financial sense, even for those with long-term care insurance
- Saves on taxes, since a portion of an entrance fee and monthly service fee may qualify as a federal income tax deduction
- Helps spare loved ones the stress of making difficult healthcare decisions during a time of crisis
- Promotes better health, allowing seniors to live as many as five years longer than those who choose to continue living at home1
- Emphasizes nutritional dining and easy access to wellness and fitness activities, forming the basis for a longer, healthier life
- Provides a maintenance-free lifestyle in a community of like-minded individuals
- Preserves a financial estate for future generations, and avoids the devastation of paying out-of-pocket for healthcare costs
1 Source: Research analysis paper released by the U.S. Department of Health and Human Services.
THE VALUE OF FEE FOR SERVICE
The Option to Pay for Healthcare Services as They’re Needed
Pennswood Village is well known for providing exceptional value, comprehensive healthcare services and an active, rewarding lifestyle. Now, a Fee-for-Service contract offers new residents a new kind of value, by including an option to pay for healthcare services as they are incurred.
A Fee-for-Service contract may be ideal for those who have long-term care insurance or who possess adequate financial resources to cover both the cost of residency and any future long-term care costs.
A Splendid Lifestyle Today and Access to Healthcare when Needed
When planning for the future, financial considerations are often top-of-mind, which is why a Fee-for-Service contract is a welcome alternative to Life Care for some prospective residents of Pennswood Village. Here is the ideal profile of a good candidate for a Fee-for-Service contract:
- You have funds that are adequate for self-funding your future healthcare needs
- You have a long-term care insurance policy
- You’ve had relatively few health issues, and don’t want to pay for healthcare costs you feel you may not need
- You want the option to choose your own means of providing for future healthcare needs
- If you meet any or all of these criteria, you’ll experience lower entry and monthly service fees, since you’re not pre-paying for future health care needs. And while
- you’ll have access to the extraordinary, on-campus healthcare* at Pennswood Village, you’ll simply pay for any healthcare services you use as needed.
*Availability of on-campus healthcare services is not guaranteed for Fee-for-Service contract holders.
A Great Lifestyle, Enhanced by Amazing Amenities and Services
Regardless of the type of contact you choose, all Pennswood residents have full access to the many enjoyable amenities and time-saving services offered including:
- Repairs, maintenance and utilities
- Housekeeping services
- Access to our fitness and aquatics center
- Access to on-campus concerts, lectures, exhibits and more
- Flexible dining, as defined by the dining plan you choose
You May Change to Life Care within the First 18 Months
Once a resident of Pennswood Village, you will have the ability to switch to a Life Care contract within the first 18 months of residence. Doing so requires passing the medical screening that all residents with Life Care undergo, as well as a financial pre-qualification process. You’ll also be required to pay the difference in entry fees.
A Few Requirements and Recommendations
Eligibility for all contracts require that prospective residents be Medicare eligible, with Parts A, B and D coverage. Supplemental insurance is recommended to cover any costs not paid by Medicare, since any shortfall in coverage is the responsibility of the resident. As an extra means of financial protection, long-term care insurance is also recommended.