Long-term care has evolved a lot over the course of the last few decades in the United States, but it is still a mystery to many. On a basic level, long-term care is a variety of services that help people live as safely and independently as they can when they are unable to perform multiple activities of daily living (ADLs) on their own. The activities of daily living include eating, bathing, dressing, toileting, transferring, and maintaining continence. Most long-term care isn’t actual medical care, but it is help with these activities. Making a plan for long-term care can be overwhelming, but being armed with the basic information will hopefully make it a lot simpler.
Who Needs Long-Term Care?
While anyone at any age could need long-term care, over 60% of people using long-term care services are 65 or older. This number is likely to rise in the future as baby boomers, a huge proportion of the population, are aging and people are living longer. According to the U.S. Department of Health and Human Services (HHS), about 70% of people turning age 65 will need long term care services at some point in their lives.
Age is not the only factor which affects someone’s likelihood of needing long-term care. Women are more likely than men to need long-term care as they live longer. If you are unmarried and live alone, you are also more likely to need care. Genetic health issues can also give you a higher likelihood of needing care at some point.
Types of Long-Term Care
Long-term care can be provided in a number of ways, formally or informally. Examples of this include at home, at a nursing home, at a assisted living facility, and at adult day cares.
Most people prefer to stay at home as long as they can, and that is where the majority of people are now receiving their care. When you are at home, care can be provided by family members, friends, or professional home health care services. More often than not, family members are the ones providing this care, often because there was no plan in place for long-term care. This care is usually provided at a detriment to the caregiver. The value of long-term care provided by unpaid caregivers was $470 billion in 2013. These caregivers lost an estimated $3 trillion of lifetime wages due to unpaid caregiving responsibilities.
Long-term care can also be provided in a more formal setting. The average stay of someone in assisted living in a little over 2 years. Currently the average cost of one year in an assisted living facility is $45,000, with it being projected to be $65,000 in 10 years. The cost of a nursing home is even higher.
Adult day cares are a mix between the formal and informal. They are designed to provide care to older adults who need supervision during the day. These are used by caregivers, often so that they are still able to work and handle personal business.
Who pays for Long-Term Care?
You. That’s the answer. There are a few programs some people might qualify for to get assistance in paying this cost, but for most people, it is up to them, and usually their family, to pay the full cost of long-term care.
Medicare does not pay for long-term care. Many people get confused about this, but they state it many times, including on their website. Medicaid does pay for long-term care, but you must meet certain income and assets requirements, which are usually very low. Veterans Aid & Attendance is another program which will help pay for long-term care. You must meet certain requirements, such as being a veteran or spouse of a veteran, but they will send you money every month to cover qualified long-term care costs if you are eligible.
While you are responsible for covering long-term care costs, a way for you to transfer the full cost of care is insurance. There are different types of insurance available now to cover long-term care. Some of these policies will even provide you with a stipend to pay family members if they are the ones providing this care. This can take a huge burden off of your family. Long-term care insurance usually falls into three categories:
- Traditional Long-Term Care Insurance
Traditional LTC insurance covers multiple years of care, usually 2-5 years. The premiums are normally higher and they can be increased over time. Health questions will prevent some people from receiving coverage. Inflation protection is usually recommended to make sure you will still be covered when you need the policy.
- Short-Term Care Insurance
Short-term care is just what the name sounds like, it is coverage for long-term care for a short period of time, usually a year. The premiums are lower and the health questions are moderate. This is a great policy to use to give your family a year to figure out how they will continue to pay for care.
- Hybrid Long-Term Care Insurance
Hybrid long-term care is a newer form of insurance that combines life insurance and long-term care insurance. It is basically life insurance, and if you need long-term care, the policy will pay for this out of the life insurance death benefit. Many people view this as a better deal, as their premiums do not “go to waste” if they do not end up needing long-term care.
The last option to pay for long-term care is self-insurance. Paying for care without insurance is done by many people. If you end up going this route, having a plan for it will ease the burden on your family and friends if the time comes. This option sometimes makes the most sense for people who have health problems which eliminates the insurance options. This option can also be mixed and matched with insurance options to find the best solution for your own personal situation.
Without talking to someone who specializes in long-term care planning, it is really hard to figure out which of these strategies would fit your situation the best. One thing is certain, though, doing nothing and hoping for the best while aging inevitably negatively affects you and your loved ones.