What you need to know about long-term care

Understanding Long-Term Care Options and Costs for Seniors

As Americans live longer, the need for long-term care (LTC) continues to rise. Research tells us that 70% of seniors age 65 will need some form of long-term care during their life. While Medicare does offer some limited coverage for skilled nursing facility stays after a qualifying hospital stay, this is for a limited time and for continued medical care, not custodial care. Long-term care costs are often covered by Medicaid or private long-term care insurance. For seniors, navigating these options—and understanding the costs—is critical for both quality of life and financial stability.

Types of Long-Term Care

1. Home-Based Care:
   Many seniors prefer to age in place, making home care an attractive option. Services include assistance with daily activities (bathing, dressing, meal preparation) provided by home health aides. Skilled nursing services can also be arranged for medical needs. Home care allows for independence but can be expensive if 24/7 supervision is required.

2. Assisted Living Facilities:
   These offer housing, meals, and personal care in a community setting. Residents maintain some independence while receiving support. Assisted living is ideal for those who don’t need constant medical attention but benefit from help with daily tasks.

3. Nursing Homes:
   For seniors with complex medical needs or advanced cognitive issues like dementia, nursing homes provide round-the-clock medical care. These are the most comprehensive—and most costly—care facilities.

4. Continuing Care Retirement Communities (CCRCs):
   These communities offer multiple levels of care in one location—independent living, assisted living, and skilled nursing. Residents can transition as needs change. CCRCs require significant upfront fees and monthly costs, but offer long-term stability and peace of mind.

5. Adult Day Care Centers:
   For families providing care at home, adult day care centers offer daytime supervision and activities. This option provides caregivers a break and seniors with social interaction and basic medical oversight.

Cost of Long-Term Care

• You are right to point out the significant financial burden of long-term care (LTC) based on the figures from the Genworth 2024 Cost of Care Survey. The provided data highlights how expensive these services can be. 
  Based on the survey, here are the approximate national median monthly costs for various types of long-term care in 2024: 
  • Home Health Aide: Approximately $6,300/month (based on 44 hours per week).
  • Assisted Living Facility: $5,900/month.
  • Nursing Home (Semi-Private Room): $9,277/month.
  • Nursing Home (Private Room): $10,646/month. 

These costs vary by region and level of care required. Over several years, LTC expenses can easily exceed hundreds of thousands of dollars.

Paying for Long-Term Care

Most health insurance plans, including Medicare, do not cover long-term custodial care. Medicaid will cover LTC, but only for those who meet strict income and asset limitations. Options to prepare include:

• Long-Term Care Insurance: Helps cover care costs but must be purchased before significant health issues arise.

• Life Insurance with LTC Riders or Hybrid Policies: These allow policyholders to access death benefits early to pay for care.

• Personal Savings and Investments: A common but risky approach without proper planning.

• Annuities and Trusts: These financial tools can be structured to provide income or shelter assets for Medicaid eligibility.

Planning for long-term care is essential. Early discussions with a financial advisor or elder law attorney can help families explore options and create strategies to manage the high cost of care without compromising other retirement goals. For seniors and their loved ones, the peace of mind that comes from being prepared is invaluable.

Sources:

https://aspe.hhs.gov/reports/what-lifetime-risk-needing-receiving-long-term-services-supports

https://investor.genworth.com/news-events/press-releases/detail/982/genworth-and-carescout-release-cost-of-care-survey-results

https://health.usnews.com/senior-care/caregiving/types-of-long-term-care-facilities

https://www.medicare.gov/coverage/long-term-care

https://www.medicare.gov/providers-services/original-medicare/nursing-homes/payment