Long term care services are often required when you need assistance with everyday activities, such as using the bathroom, taking a shower, dressing, or moving in and out of a bed or chair.
Care can be provided in different settings, including your home, an assisted living facility, or a nursing home.
Things can happen - often without warning. That's why it's important to have a plan for your care in place before you need it. Now is the time to look at your options and plan ahead for your long term care needs.
These costs are expected to continue to rise. Based on national averages and assuming 5% inflation, one year in a nursing home could cost more than $110,000 in 2015 and over $180,000 in 2025.
Your Family
You may plan to rely on family members or friends to provide your care. But wouldn't you prefer to spend quality time with them, rather than getting help with day-to-day needs? Currently, nearly one out of four people in the U.S. provides unpaid care to relatives or friends.3 While these caregivers may willingly give their time to care for loved ones, being the primary caregiver can take a toll on a person's physical and mental well-being, and may be a financial drain since that person may not be able to earn full-time wages.
Your Savings
Based on the high cost of care, your savings could be depleted over time. If the average length of time for informal or custodial care in the home is 4 years2, based on the average annual cost of care of nearly $53,000, you could be facing nearly $212,000 for home care. The average stay in a nursing home is about two and a half years4. At an average of nearly $75,000 per year, that could add up to $187,500 or more.
The Government
Medicare generally offers very limited coverage for skilled nursing homes and only for a short period of time. It is not designed to cover long term care and does not offer significant help with these expenses.
Medicaid does help pay for the cost of long term care services but it is designed as a safety net for the needy. In most states, financial eligibility for Medicaid requires that you have low income and few assets.
For example, in 2006, to be eligible for facility benefits a typical state might require one to:
A) spend down his or her assets to $2,000 excluding primary home and care.5
B) have income of less than $1,809 a month (300% of SSI payment.)6
Each state's requirements vary.
Insurance
Long term care insurance is specifically designed to help pay for long term care. It can help you preserve your savings and assets while giving you more choices about your future care.
With long term care insurance, your savings can remain protected, and your retirement plans carried out. Additionally, you may be able to access higher quality care for a longer period of time - without imposing upon family or friends.