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Did You Know -
Premiums for
long-term care insurance policies may be tax deductible?
Find out more...
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What is Long-Term Care?
Long-term care is the help that a person (of any age) needs to maintain the activities of daily living such as bathing, dressing, and eating. Care may be needed as the result of an accident or illness, a dementia such as Alzheimer's, or simply due to the natural aging process.
Care can be provided in the familiar surroundings of one's home, in an adult day care center, assisted living facility, nursing home, or by hospice.
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The two kinds of long-term care are skilled and non-skilled care. Skilled care providers are licensed to provide certain types of care including speech or physical therapy, registered nursing or social work. Non-skilled care providers are not licensed to perform their services. They include nurse's aides, homemaker service providers or family members.
How much do long-term care services cost?
That depends on where you live and the type of services you need. According to a recent MetLife study, daily nursing home costs average $205 ($75,000/year). Home health care averages $20 per hour, and the average cost in an assisted living facility is $115/day or $41,975/year.
Costs are projected to triple in 20 years according to the General Accounting Office. This is based on a 5.8% annual growth rate, which is also supported by projections from the Health Care Financing Administration for the period 2003-2007.
Ask yourself: How long can I afford to pay $75,000 a year out of my own pocket?
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Sources that do not pay:
- Health Insurance (group or individual) pays only for short-term recovery benefits.
- Medicare pays only short-term recovery benefits - the average is 23 days.
- Medicare Supplements pay only short-term recovery benefits when care meets the strict Medicare criteria.
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Sources that do pay:
- Medicaid (welfare) pays only for nursing home care after you have used up all your own assets. Caution: Recent legislation makes it difficult to transfer assets to qualify for Medicaid.
- Life Insurance may advance all or part of the death benefit on some policies.
- Reverse Mortgages - a financial institution buys your home but allows you to live there during your lifetime.
- Long-Term Care Insurance is the best solution for most people. Policies are available to ages 18 and older.
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For more information, see our Key Questions...
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