| LTC Overview |
| The Reality |
| Americans are living longer than ever before. Many of us, our friends and relatives, will require long-term care at some point during our extended lifespan. Disabling accidents or chronic illnesses that require basic levels of assistance such as bathing, dressing, or transferring (getting in or out a bed or chair) affect the working age adult as much as the retiree. With LTC costs increasing due to the growing boomer population and shortage of caregivers, planning is essential to securing your financial future. Before the need for long- term care arises, you should consider: |
- Where will the money come from to pay for care?
- How will this affect your family?
- What impact will this have on your retirement savings?
|
| Risks |
We often take our health for granted, but we also know that things can change very quickly. We typically assume accidents happen to other people, not to us…., until it does.
Life changing conditions can happen at any age, including stroke, coronary heart disease, osteoporosis, diabetes, Parkinson’s and Multiple Sclerosis (MS). Whether it’s an accident or an illness, providing or paying for the medical and social services for ourselves or a family member’s chronic care needs takes a huge toll on family and personal assets. |
| Living a long life, into our 80s and 90s or beyond, is becoming more common. Preparing for the consequences of advanced aging is imperative. |
| Current Average Cost |
Costs of long-term care services vary. Nationally, daily home care costs average $21 per hour . Monthly Assisted Living Facility charges average between 2/3 to 3/4 of nursing home costs. Daily nursing home costs are approximately $229 (private) and $205 (semi-private) — an annual cost of $83,585 (private care) and $74,825 (semi-private). In major metropolitan areas, costs may be higher for all types of long-term care services. For example, daily nursing home costs for a semi-private room average $253 a day in Baltimore and $272 in Washington, D.C. |
| Future Cost |
Assuming a 5% annual increase in the cost of a nursing home stay, the annual cost |
- in 10 years will amount to $143,257
- in 20 years will amount to $233,351
- in 30 years will amount to $380,105
|
| Paying for care: There are four options |
- Government programs: Medicare and Medicare Supplements exclude custodial care and are specifically designed to pay for skilled services. Long-term care services cover chronic health conditions where there is generally very limited skilled services being rendered, since there is not an expectation of recovery. It is estimated that Medicare covers only 16% of long-term care costs nationally.
 Medicaid is a safety net for those with very limited assets. The Deficit Reduction Act of 2005 has changed the rules on eligibility and made it more difficult to qualify (Deficit Reduction Act: Winners & Losers, Harley Gordon. Pdf)
- Your family: adult children may make promises that are hard to keep. Extended caregiving for families by family members contributes to a significant decline in physical and emotional health. Expectations and reality are seldom the same in caregiving.
- Self-insuring: Paying for your future care needs may not be the most prudent financial or estate planning strategy. Please inquire for your free personal benefit cost analysis.
- LTC insurance: it’s a solid financial planning tool but may not be for everyone. LTC insurance premiums are based on your age and health at time of application, amount of coverage you buy and available discounts (spousal/partner; preferred health rating; employer/association discount; other financial products with same insurance company). Complete the quote request form for a free estimate.
|
| |
Rates are based on the MetLife Mature Market Survey of Nursing Home and Home Care Costs 10/2010. Costs have been rounded to the nearest dollar. Averages were taken when multiple cities were listed.
|
| Costs are based on current average rate of $253 per day. |
| Centers for Medicare & Medicaid Services, Office of the Actuary, National Expenditures Tables, 2008. |
| |
|
|
