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Long Term Care Planning

No one “expects” to need long-term care, and it’s not surprising that few of us do, because it’s hard to face the fact that our health might decline. But statistics suggest that the risk is greater than we think.

Age related disease

Approximately 52% of us will need some type of long-term care services during our lifetimes at some point after we reach age 65. And though it’s good news that people are living longer, a long life span increases the chance of developing serious health problems. In fact, according to the Alzheimer’s Association, one in ten people age 65 and older has Alzheimer’s disease, which often leads to the need for nursing home care. And while older people are more likely to need long-term care, younger people may need care too, as a result of a disabling accident or illness such as multiple sclerosis or Parkinson’s disease.1

This isn’t meant to scare you, but rather to remind you that the need for long-term care can happen to anyone at any time. The need to be prepared is real, and something that you shouldn’t ignore. It is unpleasant for most of us to envision a time when performing routine tasks may become difficult due to injury, illness, or aging. If the time comes when you need substantial assistance performing daily tasks, it is unlikely you will want cost to be the primary decision-making factor for your long-term care. Long-term care (LTC) services can be expensive, and prices generally continue to rise. Planning early can help ensure that you have more control in receiving the type of care you want — in the setting you choose, should the need arise.

What is long-term care?

Let’s begin by talking about what’s meant by the phrase “long-term care.” Long-term care refers to the ongoing services and support needed by people suffering from chronic health conditions or disabilities. 

There are three levels of ongoing care someone might receive: 

  1. Skilled care, which is generally round-the-clock care provided by professional health-care providers such as nurses, therapists, or aides under a doctor’s supervision. 
  2. Intermediate care, which is also provided by professional health-care providers, but on a less frequent basis than skilled care. 
  3. Custodial or personal care, is often provided by family caregivers, nurses’ aides, or home health workers who provide assistance with what are called “activities of daily living” such as bathing, eating, and dressing. This is the most common type of long-term care. 

All three levels of care can be provided in many different settings, including your own home, an assisted-living facility, or a nursing home. Like a patchwork quilt, a long-term care plan is usually made up of different pieces, with many people involved in putting it together. A good long-term care plan will account for the different types of care you might need, and the different settings in which you may someday receive that care. 

Making it Work

There are many alternatives to consider when preparing for the possibility that you may need long-term care. Generally, beginning early has advantages. First, you are more likely to be healthy and qualify for various insurance types at younger ages. Second, starting early means, you may be able to meet your goal with lower installment savings amounts or annual premiums.

Key Question: How expensive is long-term care?

The type of long-term care that’s likely to cost the most is nursing home care. The average nationwide cost for a semi-private room in a nursing home was $82,125* in 2019, but in some states, it’s much higher. For instance, the average cost of nursing home care in New York was $141,072 per year* And in the future, long-term care will cost even more. If costs rise every year at an average rate of 3% per year in 20 years, the average annual cost of nursing home care will be approximately $148,327.2

It’s easy to see how the high cost of long-term care can threaten-or even wipe out– your retirement savings, and jeopardize any assets you had hoped to leave to your children or grandchildren. Every year, many Americans are burdened by the need to pay for nursing home care, but here’s the good news – with proper planning, you can avoid having this happen to you.

[1] Melissa Favreault and Judith Dey, “Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief,” Office of the Assistant Secretary for Planning and Evaluation, US Department of Health and Human Services, Washington, D.C. July 1, 2015, https://aspe.hhs.gov/reports/long-term-services-supports-older-americans-risks-financing-research-brief-0

[2] *Source: U.S. Department of Health and Human Services

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