As we age, it becomes more likely that some sort of long-term illness or disability will force us to seek long-term care. You might think of long-term care as this big, harry, expensive thing that you don’t have to worry about until you’re really, really old. But, lot’s of people do worry about it. A survey conducted by Age Wave/Harris Interactive found that adults are five times more worried about being a burden on their family than dying when it comes to having a long-term illness.
Will I really need long term care?
According to the Associated Press-NORC Center for Public Affairs Research, 70% of Americans aged 65 and older will need some form of long-term care. Not to depress anybody, but these are the facts.
What are my options?
- Rely on family. This is actually what usually ends up happening. It’s an older statistic, but as of 1999, 66% of adults aged 65 and older relied strictly on informal care (a family member, friend or neighbor). This number is expected to have grown since 1999.
- Move to an assisted-living facility. AKA, the college dorm for old people. There are different levels of assisted living depending on how much assistance you require. But, generally speaking there is no medical assistance offered at these types of places.
- Nursing home care. This is probably the option people think of most when they think of long-term care. It’s 24/7 medical attention, plain and simple.
- In-home care. This is probably the gold-standard of long-term care options. If money were no object, most people would choose to stay in their own house and have a care-taker either stop by for a daily visit or live with them.
How long will I stay?
The average length of stay in some sort of long-term care facility is 2.5 years.
How much will it cost?
The Federal Long Term Care Insurance Program has a great side-by-side cost-comparison of the average annual cost of each option:
- Nursing home, semiprivate room – $82,855.
- Assisted living facility – $41,124.
- In-home care – $29,640
Keep in mind these are national averages. Prices may be higher or lower depending on where you live.
How do I pay for all this?
- Out of your own pocket. If you’ve saved and invested wisely, you should have enough to cover your long-term care expenses out of your own pocket.
- Long-term care insurance. If you’re in your 50’s, or maybe even in your early 60’s, you might consider purchasing long-term care insurance. The American Association for Long-Term Care Insurance says the average cost is $2,007 per year for a single adult at age 55, $2,466 per year for a couple, both age 55. As you get older, the cost goes up.
- Medicare – not an option. Many people are under the assumption that Medicare will help with long-term care. However, Medicare is strictly health insurance. It does not cover assisted living, long term stays are nursing homes, or in-home care.
- Medicaid. Unlike Medicare, Medicaid does cover long-term care, but there are strict income eligibility requirements.
- VA Benefits. If you or your spouse is a military veteran, VA benefits can also be used to help pay for care.
The biggest drawback of relying on either Medicaid or VA benefits is the complexity of these programs. It’s unfortunate that the same people who need these benefits may already be declining mentally or physically and aren’t always equipped to run through these bureaucratic gauntlets. Thankfully, there are many companies and organizations out there that can help you navigate the bewildering world of government benefits. Your family or friends may also be able to help.
The best way you can avoid being a burden on your loved ones, is to have a plan in place for your long-term care. That includes a way to pay for that plan. The more money you can save and invest, the more options you will have. In fact, one of the best reasons to build wealth is so you’ll have choices when you’re ready to enter long-term care. Don’t procrastinate! The sooner you start, the better!
Do you have a long-term care plan in place?