Most people have never imagined that they would need long-term care one day. However, the likelihood of needing assistance with daily activities increases with age. According to a briefing from the U.S. Department of Health and Human Services (HHS), 56% of Americans over the age of 65 will develop illnesses that require long-term care.
Therefore, whether it’s for yourself or your loved ones, the need for long-term care due to chronic conditions, accidents, or simply aging may arise at some point in the future. Planning ahead can effectively safeguard your health and financial situation, even if it may feel uncomfortable.
“Long-term care” refers to the various services provided to individuals who cannot independently perform their daily activities, including medical, social, and personal needs. These needs are not just minor inconveniences but are crucial for preserving one’s independence and dignity. Common services include bathing, dressing, eating, toileting, mobility (from bed to chair), and incontinence care. Long-term care can offer essential assistance as these abilities decline.
The ways to receive help are not limited to specific locations. Depending on personal preferences and needs, long-term care can take various forms, including:
– Nursing Homes:
Provide 24-hour medical supervision, professional care, rehabilitation services, and assistance with Activities of Daily Living (ADLs). Nursing homes are often the best option for those with significant medical needs or requiring ongoing monitoring.
Assisted Living Facilities:
Different from nursing homes, assisted living facilities, also known as retirement homes, serve as a transitional option between independent living and nursing homes. Residents typically live in apartments or private rooms and receive assistance in daily activities, medication reminders, meal arrangements, and social activities to balance independence and care.
In-Home Care:
In this scenario, care can be provided in a familiar environment, ensuring individuals receive comfortable care at home. Service ranges can vary from assistance with specific tasks for a few hours to full-time care, based on individual needs. If independence is valued and finances allow, this is a viable choice.
Adult Day Care:
During the day, adult day care provides care, social activities, and sometimes rehabilitation services for adult residents. This is a valuable resource for caregivers who need to work or just need a break.
One’s health condition may deteriorate over time, leading to the need for long-term care, which is not uncommon. However, the cost of long-term care can be extremely high, often amounting to thousands of dollars per month. Therefore, a long-term care plan is essential to maintain a high quality of life and protect your assets from the financial burden these services entail.
Statistics on long-term care can be both surprising and thought-provoking. As mentioned, most individuals will require long-term care at some point in their lives. Despite this, many people have not adequately prepared for the potential high costs.
In the final years of my grandparents’ lives, they had to apply for a reverse mortgage because they had not considered their need for in-home care. Although they were living within their means, and their pension was sufficient to cover their daily expenses, they had not taken long-term care into account.
Long-term care insurance company Genworth estimates that a single room in a nursing home costs $350 per day or $10,646 per month. The average cost for a semi-private room shared by 2-3 individuals is $305 per day or $9,277 per month, amounting to $111,325 annually, while the yearly cost of a single room is $127,750.
Moreover, the costs of assisted living facilities are on the rise, despite offering nursing services at a lower level than nursing homes. The daily cost at an assisted living facility is around $194, monthly costs are approximately $5,900, or $70,800 annually, depending on the state. However, it’s important to note that these figures do not include special care services such as memory care or disability care.
Even in-home care is costly, with a median cost of $75,504.
While federal health insurance (Medicare) covers some medical services, it does not include long-term care. Many people mistakenly believe that Medicare covers these costs; however, Medicare only covers skilled nursing or short-term rehabilitation after hospitalization. Once Medicare coverage ends, alternative ways must be found to pay for ongoing care expenses.
It is evident that bearing the cost of long-term care individually can lead to financial collapse. Therefore, you should develop a comprehensive long-term care plan to meet health care needs and ensure adequate financial protection to meet these needs.
A long-term care plan should not be put off until the distant future or only devised in emergency situations. The earlier you start this crucial planning process, the more likely you are to shape future care and financial security effectively. Delaying planning could severely limit your options, potentially resulting in inferior outcomes.
A proactive and thoughtful long-term care plan incorporates the following aspects:
– Lowering insurance premiums:
Long-term care insurance is one of the most effective tools to reduce care costs. Purchasing a policy when young and in good health significantly lowers premiums. By locking in coverage early in life, you can secure more affordable prices during the policy’s term. On the contrary, delaying coverage may lead to higher premiums or even disqualification.
– Better control of your care:
Advance planning allows you to decide the location and manner of care, study different care options, assess care facilities, and clarify your preferences, including the type of assistance needed and living environment, to ensure alignment with your values. Without a pre-established plan, sudden crises may lead to stress, conflicts, and outcomes that do not fully reflect your desired wishes.
– Protecting family and loved ones:
Providing care or arranging long-term care can be physically and financially burdensome. Without a reliable plan in place, family members often bear the brunt, leading to strained relationships and financial pressure. Developing a plan in advance ensures that your loved ones receive full support and assistance when facing complex medical decisions and financial burdens.
– Peace of mind:
Creating a comprehensive plan can provide peace of mind. Knowing that you have taken measures to secure your future health and financial well-being when needing long-term care can alleviate anxiety and uncertainty. Whether through purchasing insurance, establishing dedicated savings, or employing other financial strategies, you can feel in control of the future and be prepared.
To devise a robust long-term care plan, a thorough assessment of your financial resources and potential healthcare needs is necessary. Your planning process should include the following components: