The Basics of Long-Term Care

What is Long-Term Care?

Long-term care (LTC) is a term used to describe a variety of services for people who are unable to care for themselves. This can be due to a prolonged illness or injury or the simple process of aging.

Many people think long-term care means going to a nursing home. Today, a variety of long-term care services actually may help keep people out of nursing homes by allowing them to remain at home or live independently as long as possible.

Long-term services include:

  • Home Health Care

    Most people prefer the comfort of their own homes. And when they need assistance with everyday activities, a variety of options are available.

    • Family members may be the first source of long-term care services. When a loved one needs help, the family generally will step in to assist with household and personal tasks.
    • Homemaker and companion services typically include help with household chores, transportation and other daily activities.
    • Home health aides may provide personal care services, household tasks and help with medications.
    • Visiting nurses may evaluate home safety, monitor medical conditions, oversee medications and provide other skilled health care services.
  • Assisted Living

    People who are no longer comfortable or able to live in their homes, yet who don't need round-the-clock nursing care, may choose to live independently in a setting that provides a strong support system. Residents of assisted living facilities typically live in their own apartments while enjoying services like meals, recreational activities and transportation along with long-term care services.

  • Nursing home

    People who need 24-hour care may receive long-term care services in a nursing home. Many nursing homes offer programs that address the well being of its residents. These may include gardens, pets, cultural activities and nutritional programs. Some facilities are designed to meet the special needs of residents with Alzheimer's disease.

Will I need long-term care?

It’s difficult to predict what the future will bring. If you’re like most people, you plan to live a long life.

Consider this:

  • Living a long life means you’ll get older, and the older you get, the more likely you’ll be to need assistance

But, younger people may need help, too. Medical advances are saving the lives of people with catastrophic conditions like head injuries, heart attacks and strokes.

Consider this:

  • The need for long-term care services may arise at any age

What does it cost?

Long-term care typically involves one-on-one, customized care. And that may be expensive. Here are two things you should consider:

  • The cost of long-term care services today

    Today’s National Average Cost of Long-Term Care Services

    Note: Home health care costs are based on services provided by a non Medicare-certified home health agency. Annual costs are based on eight hours per day, five days per week, 52 weeks per year.

    Source: Long-Term Care Cost-of-Care Survey conducted by CareScout, 2008
    Home Health Care
    Home Health Aide $3,293 per month $39,520 per year
    Homemaker Services $3,120 per month $37,440 per year
    Assisted Living Facility
    One-Bedroom Unit $2,813 per month $33,756 per year
    Nursing Home
    Semi-Private Room $5,383 per month $64,605 per year

    Get costs for care in your state

  • What those services may cost years from now

    Projected Annual Cost of Long-Term Care Services
    (Assuming a five percent annual increase)

    Note: Home health care costs are based on services provided by a non Medicare-certified home health agency. Annual costs are based on eight hours per day, five days per week, 52 weeks per year.

    Source: Long-Term Care Cost-of-Care Survey conducted by CareScout, 2008
    Home
    Health Care
    Today 5yrs 10yrs 20yrs
    Home Health Aide $39,520 $50,439 $64,374 $104,858
    Homemaker Services $37,440 $47,784 $60,986 $99,339
    Assisted Living Facility
    One-Bedroom Unit $33,756 $43,082 $54,985 $89,565
    Nursing Home
    Semi-Private Room $64,605 $82,454 $105,235 $171,416
    Private Room $73,000 $93,169 $118,909 $193,691

    Calculate future costs

How will I pay for services?

There are three basic strategies you may use to pay for long-term care services:

  • Purchase long-term care insurance

    A long-term care insurance policy may help protect your retirement nest egg from being depleted by making funds available to pay for covered services.

    Consider this:

    • Long-term care insurance helps you to receive the care you need in the setting that’s right for you
    • A long-term care insurance policy may help prevent you from becoming a burden to your children
    • A long-term care insurance policy may be more affordable than you think. Get a fast, free quote
  • Rely on the government

    Public programs, like Medicaid, offer an important safety net for people with limited financial resources. If you choose this strategy, you may need to spend down your assets to meet eligibility requirements.

    Consider this:

    • Medicaid is a program of last resort for people who can’t pay for their own care and is not intended to provide long-term care services for everyone
    • Medicaid rules can change. Recent changes have made it more difficult to qualify for benefits
    • The states may seek reimbursement from your estate for Medicaid benefits paid to you
  • Pay for services yourself

    Using your savings or other assets takes careful planning to ensure funds are available to pay for the care you may need without compromising your lifestyle.

    Consider this:

    • Assets like your home, business or family farm may be difficult to liquidate if you need funds to pay for long-term care services
    • Liquidating IRAs, stocks and mutual funds can trigger income taxes, which in essence, increases the cost of long-term care services
    • Don’t overlook the cost of future earnings you may lose on liquidated assets

Why should I plan?

You already may have allocated funds to pay for the things you want to do in retirement. But what have you set aside to pay for long-term care expenses that may arise? Having a plan in place before the need for long-term care arises may help you protect all the things that are important to you:

  • Your Finances
    • Have you thought about whether you’ll have the resources to pay for long-term care services out of pocket?
    • Have you considered whether you can save enough to cover long-term care costs along with everyday expenses associated with retirement?
    • Have you considered the fact you might have to sell assets to pay for your care?
  • Your Family
    • Have you thought about whether you would want family members to help care for you?
    • Have you asked your children if they would be able to care for you and continue to meet their own family and work obligations?
    • Have you discussed moving in with one of your children? Have you identified which child you would live with?
  • Your Freedom
    • Have you thought about where you’ll go if you need long-term care services?
    • Have you considered that you may not be able to make decisions for yourself?
    • Have you discussed your wishes with your family?
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