“Medicare does not cover long-term care after 100 days
This article is 2nd in a Series on Long Term Care
Have you ever asked yourself: “What are the chances that I’ll need long-term care?” As people age, their risk of needing long-term care services rises. According to the U.S. Department of Health and Human Services, about 70 percent of individuals over age 65 will require at least some type of long-term care services during their lifetimes. (See “Projected Age Groups and Sex Composition of the Population, 2017,” U.S. Census Bureau)
The following factors increase one’s risk of needing long-term care:
- age—The risk generally increases as one gets older. Age is the most significant risk factor leading to long-term care.
- marital status—Single people are more likely to need care from a paid provider.
- gender—Women are at a higher risk than men, primarily because they tend to live longer.
- lifestyle—Poor diet and exercise habits can increase one’s risk.
- health and family history—also impact one’s risk.
Studies have revealed other factors that are statistically associated with the risk of needing care in a nursing home or an assisted living facility. These include the following:
- income & education—Persons with lower incomes and/or education have a greater risk of moving to a care facility than do persons with higher incomes.
- family structure—The presence of potential caregivers has a strong and significant effect on the risk of transitioning to a nursing home or assisted living facility. Those who are single and have no living children are almost three times more at risk of being admitted to a facility than married individuals with children.
- geography—Those who live in the Midwest are more at risk of having to transition to a care facility than in other parts of the country, as are those who live in a rural area compared to a metropolitan area. (See “Estimates of the Risk of Long-Term Care: Assisted Living Facilities and Nursing Home Facilities,” U.S. Department of Health and Human Services, July 8, 2003
How much does Long-Term Care Cost?
The medical, personal, and social services necessary because of an accident, a chronic illness, a disability, or simply the phenomenon of aging—services associated with long-term care—are among the most expensive of health care costs. The actual cost of long-term care depends on where the care is received, what type of provider administers the care, and how long the care is required. Some people require minimal assistance with only a few Activities of Daily Living for a limited time. Others require skilled nursing facility care for an extended period. Unfortunately, no one can predict who will be stricken with the need for long-term care, what type of care will be needed, or how long the care will be necessary.
According to a Genworth Cost of Care Survey here are some median costs as of 2023.
Home Health Aide- provides assistance with Activities of Daily Living such as bathing, dressing, toileting, feeding, mobility, and transferring. Does not provide any medical care: $75,500/year.
Adult Day Care - provides therapeutic, social, and other support services in a community-based setting: $21,515/year.
Assisted living facilities—a private one-bedroom unit in an assisted living facility, excluding any entrance or community fees: $64,200/year.
Skilled Nursing Facility/ Nursing homes— a semi-private room is $104,025/year and a single-occupant private room is $116,800/year. Considering that the average length of stay in a nursing home is two and a half years, the total cost of an average stay would be about $260,000 to $292,000. For many, this expense could easily consume a lifetime of savings. Others may not be able to cover the cost at all.
Why don’t more people have Long Term Care Insurance?
Generally, the public does not have a good understanding of the long-term care need, including why and how to plan for long-term care. Many simply deny that they will need long-term care; others believe, incorrectly, that Social Security, Medicare, or their existing (non-Medicaid) health insurance will cover the costs. They do not see long-term care as something one needs to plan for in advance, such as they would plan for retirement.
A report issued by the U.S. Department of Health and Human Services cited the following as key factors limiting demand for long-term care insurance:
- lack of information—Many underestimate the likelihood of requiring Long Term Care services. Some are not aware of the tremendous costs of this care.
- misperception of public and private programs—Many people believe that Medicare, retiree health plans, Medicare supplement insurance, or Medicare Advantage covers LTC services. This is not the case.
- delayed preparation for/denial of long-term care needs—Many do not think about preparing for long-term care needs until the need arises. People tend not to think about becoming older and needing care, or they don’t anticipate that they will ever need care themselves; they resist the idea of becoming dependent.
- long lag time between purchase and benefit payment—Long-term care insurance must be purchased before it is needed; often, this means a period of many years between purchase and when benefits are likely to be paid.
- affordability—Long-term care insurance can be expensive. Many of today’s older consumers with middle to low incomes cannot afford the premiums. (Don’t worry, options will be discussed in a future article.)
- perception of need—Some consumers decide they do not need long-term care insurance because they have too few assets to protect or have family and friends available to provide care. They may underestimate the time and toll that future caregiving will demand of their family or friends.
Why should I Plan for LTC?
Given the likelihood of needing long-term care and the tremendous cost that this care entails, it is important that individuals plan for it—and the sooner the better.
Advanced planning:
- will allow for greater independence and choice as to where and how the care is delivered.
- can mean greater financial security, not only for those who may need care but also for their family and loved ones.
- can ease the financial and emotional toll on one’s family and release them from the burden of providing the care, if and when it is needed.
- will avoid the uncertainty, confusion, and mistakes that could arise in the event of a health care need.
- will promote a continued quality of life, as the person defines it, when care is needed.
Having a plan in place can make all the difference. Understanding care options, exploring financial resources, and starting the conversation early can help individuals make informed decisions. After all, aging is inevitable. But facing it unprepared doesn’t have to be.