Aging Options

The cost of long term care will take your breath away

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A recent survey of 16,000 long-term care providers by John Hancock Life Insurance Company found that the average annual cost of care across the country has risen to $94,170 for a private room in a nursing home, an increase of 3.6 percent per year since the last survey in 2011. 

A semi-private room has also seen a 3.6 percent increase per year so that the national average is $82,855 (about $227 a day).  “The cost of long-term care continues to be one of the most significant uninsured financial risks that an individual can face,” said Michael Doughty, Executive Vice President & General Manager, John Hancock Insurance.

About 70 percent of us will need some form of long term care for an average of three years and most of us hope to rely upon family members to deliver the majority of that care (although 60 percent of us haven’t bothered to notify our family members of our intent and 30 percent haven’t thought about it at all).  In addition to those shortsighted approaches to aging, almost 44 percent of Americans mistakenly believe that Medicare pays for ongoing home care by a licensed home health care aide and 37 percent incorrectly believe that Medicare pays for ongoing care in a nursing home.

There’s plenty wrong with all those assumptions.  Take for instance the idea that family will care for us as we age.  The Baby Boomers divorced and remained childless at much higher rates than their own parents, leaving them with far fewer options for care.  In addition, Baby Boomers that did have children tended to have them later in life.  Forty-five percent of Americans over the age of 65 live alone so the traditional role of spouse as caregiver while not wrong for some isn’t completely accurate for many others either.  More than 65 million Americans already care for loved ones but middle-aged Americans are likely to find themselves in the position of having more parents to care for than children and needing to provide care usually provided by highly trained health care providers.

A 2009 survey of American caregivers (the latest survey) found that the average caregiver was a 50-year old female caring for a 77-year old woman, usually her mother.  Three of four caregivers work full-time in addition to their part-time duties as caregiver.  Some of those caregivers will leave the workforce to dedicate more time to caring for their loved one which will complicate their own retirement planning (at an estimated cost of more than $325,000 for the average caregiver according to a 2012 AARP article) and aging down the line and likely affect their own health eventually.

The handoff from hospital care or skilled nursing care is rough.  Caregiver support is still in its infancy and many family members simply don’t know what they are getting into.  At some point, either because the physical challenge of moving and caring for a loved one becomes too great an obstacle or because health issues such as incontinence, or behavioral issues such as aggression become too great, people begin to look for professional care.

And while in-home health care can be far less expensive than skilled nursing facilities, families are often surprised by the crippling costs.  The national average for a home health aide was $21 according to a 2012 MetLife study.  But there’s little financial help.  Medicare only covers skilled care in the home not services a family member can perform.   That coverage is for only a short period of time and is only for rehabilitation after an injury or illness not assistance with Activities of Daily Living (ADLs) such as bathing and toileting.  Most long-term care insurance policies will pay for in-home health care but you’ll need to shop around to find it long before you’ll need it.  The other option is Medicaid but without planning, Medicaid will only cover nursing home care if your income is below a certain level and you’ve depleted almost all of your savings.

There’s a home care revolution underway that includes among other things creating networks of nonprofit elder care agencies and using robotic technology but those care options are in the future.  Looking to the present, successful long term care options involve a family conversation about care options, an elder law attorney to coordinate planning and assist with choosing an appropriate long term care policy, understanding the players that can make transitions smoother and being knowledgeable about VA and Medicaid Benefits.  More importantly it involves taking steps today to prepare for tomorrow.



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