Source: Centers for Medicare and Medicaid Services, 2012
What Is Long-Term Care?
Long-term care is not a single activity. It refers to a variety of medical and non–medical services needed by those who have a chronic illness or disability—most commonly associated with aging.
Long-term care can include everything from assistance with activities of daily living—help dressing, bathing, using the bathroom, or even driving to the store—to more intensive therapeutic and medical care requiring the services of skilled medical personnel.
Long-term care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And long-term care is not exclusively for the elderly; it is possible to need long-term care at any age.
How Much Does Long-Term Care Cost?
Long–term care costs vary state–by–state, and region–by–region. The national average for care in a skilled care facility (single occupancy in a nursing home) is $79,935 a year. The national average for care in an assisted living center (single occupancy) is $37,572 a year. Home health aides cost an average $21 per hour, but that rate may increase when a licensed nurse is required.2,3
Fast Fact: Getting Care Now. Some 1.4 million adults currently live in skilled nursing facilities. Another 2.5 million age 65 and older remain in their own homes but get help with personal care from other people.
Sources: American Health Care Association, 2011; Centers for Disease Control and Prevention, 2011
What Are the Payment Options?
Often, long-term care is provided by family and friends. Providing care can be a burden, however, and the need for assistance tends to increase with age.4
Individuals who would rather not burden their family and friends have two main options for covering the cost of long-term care: they can choose to self’insure or they can purchase long-term care insurance.
Many self-insure by default—simply because they haven’t made other arrangements. Those who self-insure may depend on personal savings and investments to fund any long-term care needs. The other approach is to consider purchasing long-term care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.
When it comes to addressing your long-term care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach for long-term care.
Default Choice or Best Approach?
Nearly four out of five adults age 55 and older with annual incomes of more than $100,000 have opted to self insure rather than purchase long-term care insurance. Individuals who elect to self insure may rely on personal savings and investments to fund any long-term care needs.
Source: The Urban Institute, March 2011
1,2. U.S. Department of Health and Human Services, 2011
3,4. Urban Institute, 2011
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