19. March 2019
Few people are prepared to handle the financial burden of long-term health care. In fact, many people have a false sense of security when it comes to long-term care. Let’s separate fact from fiction:
“Medicare and my Medicare supplement policy will cover it.”
- Medicare and “Medigap” insurance were never intended to pay for ongoing, long-term care. Only about 12% of nursing home costs are paid by Medicare, for short-term skilled nursing home care following hospitalization. (Source: Guide to Long-Term Care Insurance, AHIP, 2013)
- Medicare and most health insurance plans, including Medicare supplement policies, do not pay for long-term custodial care. (Source: 2017 Medicare & You, Centers for Medicare & Medicaid Services)
“It won’t happen to me.”
- Almost 70% of people turning age 65 will need long term care services and supports at some point in their lives. (Source: LongTermCare.gov, November 2016)
- About 67% of nursing home residents and 70% of assisted living residents are women. (Source: Long-Term Care Providers and Services Users in the United States, February 2016, National Center for Health Statistics)
“I can afford it.”
- As a national average, a year in a nursing home is currently estimated to cost about $92,000. In some areas, it can easily cost well over $110,000! (Source: Genworth 2016 Cost of Care Survey, April 2016)
- The average length of a nursing home stay is 835 days. (Source: Centers for Disease Control and Prevention, Nursing Home Care FastStats, last updated May 2014)
- The national average cost of a one bedroom in an assisted living facility in the U.S. was $43,539 per year in 2016. (Source: Genworth 2016 Cost of Care Survey, April 2016)
- Home health care is less expensive, but it still adds up. In 2016, the national average hourly rate for licensed home health aides was $20. Bringing an aide into your home for 20 hours a week can easily cost over $1,600 each month, or almost $20,000 a year. (Source: Genworth 2016 Cost of Care Survey, April 2016)
“If I can’t afford it, I’ll go on Medicaid.”
- Medicaid, or welfare assistance, has many “strings” attached and is only available to people who meet federal poverty guidelines.
Whether purchased for yourself, your spouse or for an aging parent, long-term care insurance can help protect assets accumulated over a lifetime from the ravages of long-term care costs.