How Much Does Long Term Care Cost?
Long term care
is not cheap. The cost
depends on the amount and type of care you need and where you get it. The following are some
scary statistics about the costs of three different types of care.
Nursing Home Costs
Based on figures from the U.S. Department of Labor's Bureau of Labor Statistics the national
average cost of nursing home care in 2001 was $56,000 per year, or about $153 per day. This cost
did not include items, such as therapies and medications, which could make the overall cost much
higher, as well as inflation which will increase the numbers below.
Assisted Living Facility Costs
According to the National Center for Assisted Living, assisted living facilities reported
charging an average fee of $1,873 per month in 2001, or $22,476 per year, including rent and most
other fees. Some residents may pay more for special care needs.
Home Care Costs
The Bureau of Labor Statistics reported the national average cost of part-time basic home care
ranged from $12,000 to $16,000 in 2001. Annual costs for home health care vary based on the number
of days per week a caregiver visits, the type of care required, and the length of each visit.
Skilled care provided by a nurse is more expensive than care provided by a home health aide. Home
health care can easily cost $40,000-$50,000 per year if regular daily care is needed, even if it
is not 24-hour care.
Who pays for long term care?
A variety of ways can be used to pay for long term care. These include the personal resources
of you and your family, long term care insurance, and assistance from Medicaid for those who
qualify. Medicare, Medicare supplemental insurance, and health insurance, whether a group policy
purchased through an employer or an individually purchased policy, usually will not pay
much, if any, of the expenses of long term care.
Individual Personal Resources
Even if they do purchase long term care insurance, individuals and their families generally pay
part or all of the costs of long-term care from their own funds – because the insurance will not
cover everything. Plus, they use their own funds to pay the insurance premiums. Many people use
their savings and investments and some sell assets, such as their homes, to pay for their long
term care needs.
Medicare
Medicare's
Medicaid skilled nursing facility (SNF) benefit does not cover most nursing home care. It may
provide limited coverage in certain specific circumstances. While Medicare may pay
for some short-term nursing home care, it does not cover the costs of care in assisted
living facilities or the costs of typical homemaker services. It pays for some nursing home care
only after a qualifying hospital stay. A qualifying hospital stay is the amount of time spent in
a hospital just prior to entering a nursing home. This is at least 3 days. Medicare only
pays for home health aides to provide personal care in very limited circumstances. You must
be homebound. You must be receiving skilled care (e.g., nursing, physical therapy).
Medicare Supplemental Insurance
This is private insurance you purchase to supplement Medicare coverage. Here, again, in only
very limited circumstances will some long term care expenses be covered.
As a general rule, you should not rely on Medicare or Medicare Supplemental Insurance to
provide any kind of meaningful coverage for long term care.
Medicaid
Medicaid is
the government-funded program that pays for nursing home care, but only for people with low
incomes who have spent most of their assets. Depending on the state (they vary), Medicaid will
pay for about half of the cost of nursing home care, but only people who are basically devoid of
assets will qualify. Some people spend down their assets to pay for nursing home care and, when
that runs out, qualify for Medicaid assistance.
Long Term Care Insurance
This specified insurance protection will pay for some or all of long term care expenses. This insurance coverage began in the 1980s as nursing
home insurance, but now covers much more than nursing home expenses. Because of the aging baby
boomer generation, extended life expectancy and a desire to have quality care, this type of
insurance protection is increasingly popular as a solution for dealing with the need for long term
care. |