Paying for Long-Term Care

If you’re fortunate enough to reach the age of 65, the question is “when” and not “if” you will need long-term care services or support. About 70 percent of us who reach that milestone will need care in their remaining years. On average, women will need care longer than men.

This trend leads to the second most popular question that Genn Bervig, director of Admissions and Social Services at Eventide, hears from families who call: what will this care cost?

The short answer: it depends.

There are a variety of services and support and, likewise, a wide range of costs. No matter what kind of long-term care you will need, researching options and planning ahead financially will benefit you and your family.

Costs

Long-term care is expensive. According to the U.S. Department of Health and Human Services, the average cost for nursing home care can range from $200-$300 per day, depending on services needed and whether the resident has a shared or private room. Personal items like phone and television are extra.

Assisted living can cost more than $3,000 per month. A home health aid costs about $150/day. And homemaker services like preparing meals and light cleaning can run about $130/day.

More people use long-term care services at home than in facilities like nursing homes, according to the U.S. Department of Health and Human Services. On average, women need support for 3.7 years; men for 2.2 years.  

Ways to Pay

Some individuals qualify for public health programs like Medicaid that will pay for long-term care either in a facility or at home. To be eligible, you must meet certain financial and health requirements. Because nursing homes cost so much, residents may pay first with their own money and “spend down” resources until they qualify for Medicaid. There are rules about this.

To the surprise of many families, Medicare rarely covers long-term care, Bervig says. It will pay for a short stay in a skilled nursing home or home health care if you’ve had a three-day hospital stay prior and need skilled nursing services or therapy.

This means that most families cover these costs themselves, usually through a combination of these methods:

1.   If you have long-term care insurance, research what services are covered. Some policies cover home care and assisted living services. Others cover only nursing home stays. The cost of the policy depends greatly on your age when you purchase it and the coverage desired.

2.  Most people don’t have enough money to pay for long-term costs out of savings and retirement funding. By planning ahead, they can determine the best private payment options for them. For example, reverse mortgages, certain life insurance policies, annuities and trusts are just a few ways to help cover the costs.

Since each situation is different, it may be wise to consult with an attorney or financial planner who can help you plan for these costs, Bervig says. Be sure this expert specializes in elder law or has significant experience with the needs of aging seniors.

Also, keep researching and stay up-to-date with the best ways to pay for long-term care. As the population ages, additional ways to cover these costs are being developed.