What is long-term care?
Long-term care includes the care you need when you can no longer perform the day-to-day activities normally associated with independent living due to chronic illness, disability, disease or merely as a result of the frailties of aging. This includes performing everyday activities like bathing, dressing or eating. This assistance can be provided in your home, community, or at an assisted living facility or nursing home. In 2011, over $224 billion was spent on long-term care expenses—a whopping 10 percent of total health expenditures! And the costs only continue to rise, according to government data.
What is the likelihood that I will need long-term care?
It’s likely that you or a family member will need long-term care at some point in your lifetime. Currently, it is estimated that, on average, a 65-year-old today has a 70 percent chance of needing some type of long-term care, according to data from the U.S. Department of Health and Human Services.
This could include both care from a paid provider or care from family or friends. Your chance of needing long-term care services are greater if you are older, are female, or possibly due to a family history of longevity or debilitating disorders. And, long-term care can be expensive. If you need care, the average lifetime expenditure of someone age 65 or older who needs long-term care is about $150,000. In addition to this very real cost, families are also supplementing the care-needs of their loved ones with everyday assistance. The need for long term care is not only limited to the elderly; it may be necessary for younger individuals who are debilitated by accidents, strokes or by degenerative diseases like Parkinson’s Disease, Multiple Sclerosis or others.
Am I covered for long-term care?
Most long-term care services are NOT covered by any other kind of insurance, including health insurance, long-term disability insurance, Medicare, or Medicare supplemental coverage.
Only long-term care insurance covers the type of day-to-day personal care assistance you might need if you were unable to care for yourself as a result of chronic illness, disability or disease. This type of care is known as personal or custodial care.
Medicare does not generally cover long-term care. Medicare pays for skilled care in a nursing home only for the short period during which you are recuperating following a hospital stay (only up to 100 days). Once your care needs stabilize, and you need personal or custodial care, Medicare will not pay these costs. Medicare will only pay for care at home under very limited circumstances. Medicaid pays for long-term care only for seniors with very low incomes. Please visit the Medicare and Medicaid Long-term Care Web site for more detailed information on what Medicare covers.
What does long-term care cost?
Long-term care can be expensive. A recent news story from NPR said, “Many people don't realize that Medicare usually doesn't cover long-term care, yet lengthy assisted-living or nursing home stays can decimate even the best-laid retirement plan.”
The reality is that individuals paid $43,070 on average in 2011 for assisted living facility services and $81,030 for skilled nursing facility services, according to research from the Health Care Cost Institute. The total cost of care can be even higher depending on the area of the country where care is received, the length of stay or hours of care for home care, and the type of care needed. These costs can be a financial hardship without the benefit of long-term care insurance.
In addition to financial costs of care, there is also an emotional cost on family and friends as they struggle to support and assist a loved one who needs care. The enormous emotional stress that you and your family may experience caring for a loved one can be significant. While family may be willing to provide the care that is needed, it is important to consider the toll it takes on them. Ensuring that all of the costs of your care – emotional and financial – are not an additional burden, will provide you with peace of mind and let you focus on living your life as independently as possible.
In fact, according to a recent report, LTC insurance offers greater levels of service to meet beneficiary needs. On average, LTC beneficiaries receive 14 more hours of personal care per week than those without insurance. Individuals who chose LTC coverage reduce their chances by 66 percent of having to spend down assets to the point of impoverishment or to become eligible for Medicaid.
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