Long-term care is a term that refers to the services and support that people may need as they age or face chronic health conditions. Long-term care can include personal care, such as bathing, dressing, and eating, as well as medical care, such as nursing, therapy, and medication management. Long-term care can be provided at home, in the community, or in a facility, depending on the level of need and preference of the individual.
According to Genworth, a leading provider of long-term care insurance, the cost of long-term care has been increasing steadily over the years. In 2021, the national median cost of long-term care services was as follows:
Homemaker services: $4,957 per month
Home health aide: $5,148 per month
Adult day health care: $1,690 per month
Assisted living facility: $4,500 per month
Nursing home semi-private room: $7,908 per month
Nursing home private room: $9,034 per month
These costs vary widely by state and region and are expected to continue to rise in the future due to factors such as inflation, supply and demand, and COVID-19-related expenses. Genworth provides a cost-of-care survey tool that allows users to calculate the cost of long-term care in their area and project the future cost based on historical trends.
The rising cost of long-term care poses a significant financial challenge for many Americans, especially those who are approaching retirement or have already retired. According to Genworth, 70% of people will require long term care at some point in their lifetime2, and the average duration of long term care is about three years3. This means that many people will face a substantial expense that may not be covered by their savings, income, or insurance.
Therefore, it is important to plan ahead for the possibility of needing long term care and explore the options available to pay for it. Some of the common ways to pay for long term care include:
Personal savings and assets: This is the most straightforward way to pay for long term care, but it may not be sufficient or sustainable for many people. Depending on the type and duration of care needed, the cost of long term care can quickly deplete one’s savings and assets, leaving little or nothing for other expenses or heirs.
Medicare and Medicaid: These are government programs that provide health insurance for older adults and low-income individuals. Medicare covers some aspects of long term care, such as skilled nursing facility care after a hospital stay, but only for a limited time and with certain conditions. Medicaid covers more types of long term care, such as nursing home care and home and community-based services, but only for those who meet the eligibility criteria based on income and assets. Both programs have strict rules and regulations that may limit one’s choice of providers and quality of care.
Long term care insurance: This is a type of insurance that pays for some or all of the cost of long term care services, depending on the policy terms and benefits. Long term care insurance can help protect one’s savings and assets from being spent on long term care and provide more flexibility and control over the type and quality of care received. However, long term care insurance can also be expensive and difficult to obtain, especially for older adults or those with pre-existing health conditions. Moreover, some policies may have exclusions, limitations, or waiting periods that affect the coverage and payout.
Other options: There are also other ways to pay for long term care that may suit some people’s needs and preferences better than others. For example, some people may choose to rely on family members or friends to provide informal or unpaid care at home or in their community. Others may opt for alternative living arrangements, such as co-housing or shared housing with other seniors or caregivers. Some may also use financial products or strategies, such as reverse mortgages, annuities, life settlements, or trusts, to generate income or access equity to pay for long term care.
Planning for long term care is not an easy task, but it is a necessary one. By being proactive and informed about the cost of long term care and the options available to pay for it, one can make better decisions that suit their needs and goals. Genworth offers various resources and tools to help people plan for their long term care needs. Additionally, one may consult with a financial planner or an elder law attorney to get professional advice and guidance on their specific situation.
Call Us at 631-676-4400 (New York)
561-237-8000 (Florida)
or at https://www.myhelpinghearts.com/contact-us
Comentarios