The Cost of Long Term Care
What Are the Costs of Long-Term Care?
Long-term care is actually the greatest uninsured risk Americans face (U.S. Department of Labor, 2008). Based on the MetLife Mature Market Institute Survey of Nursing Home & Assisted Living Costs (October 2008) and Adult Day Services & Home Care Costs (September 2008), average costs are:
Home Health Care (2008)
Costs for Home Health Care Aides
Hourly high = $ 28.00
Hourly low = $ 12.00
National average hourly rate = $20.00
Average yearly rate (assumes five hours a day, five days per week) = $ 26,000
Assisted Living-Base Rate (2008)
Monthly high = $ 4,708
Monthly low = $3,031
National average yearly rate = $ 36, 372
Nursing Home Costs for Semiprivate Room (2008)
Daily high = $566
Daily low = $121
National average daily rate = $ 191
National average yearly rate = $ 69,715
Note: All costs listed above are subject to change in 2009 and beyond
You should be familiar with the costs for various types of care and facilities in your area. A local market survey of several home health care agencies, assisted living facilities, and nursing home should be a prerequisite before engaging any client or prospect in a discussion of long-term care and LTC planning. Help the person consider the costs of where he or she lives now, and where the person may be living in the future.
Who Pays For Long-Term Care?
The majority of the American public is uninformed about the risks of needing long-term care, the cost of long-term care, and who pays for it. Most people believe Medicare pays for long-term care. It does not. It may pay for a portion of skilled and rehabilitative care needs, but only if a series of strict requirements are met. Most traditional health insurance policies are working-age adults, dealing primarily with acute health care expenses, cover only skilled care, not custodial long-term care costs. While long-term disability insurance addresses lost wages during an illness or injury, it does not provide resources to cover the additional costs of long-term care. In addition, disability coverage ends at retirement.
Medicaid – the health care component of the American welfare system – does cover long-term custodial care costs, but primarily for care in nursing homes, and it is generally available only to those who have nearly exhausted their assets. There are only two other options: paying out of pocket or purchasing long-term care insurance (LTCI) to cover some or all of the costs.
The information above is reprinted from Working with Seniors: Health, Financial and Social Issues with permission from Society of Certified Senior Advisors® . Copyright © 2009. All rights reserved. www.csa.us