This month we are focusing our educational series on LONG-TERM CARE.
What are the risk factors that affect the likelihood of a person needing long-term care?
- Age: Individuals over age 65 have a 70 percent chance of needing some type of long-term care services in the future, and 40 percent will need nursing home care, according to the U.S. Department of Health and Human Services.[1]
- Gender: Women, on average, have longer life expectancies than men
- Medical history: People with chronic health issues are more likely to need increased assistance with personal care in the future
- Marital/domestic-partner status: Single people are more likely to seek paid care if they don’t have family members or friends able and willing to assist them. Having a spouse or domestic partner around to help may delay the need for professional medical service providers
- Availability of family caregivers: If a person who has any children or family members that can step-in and help provide care for an aging parent can further the delay the cost of paid care
Long-term Care providers provide services that can take place in the home or in a facility. These services include:
- Home-based and community-based care
- Personal care to assist with Activities of Daily Living (ADL’s)
- Homemaker services to help people stay in their home by providing assistance with activities like meal preparation, food shopping, laundry, and housecleaning
- Home health care provided by trained medical personnel
- Adult Day Care
- Respite Care – to help relieve family caregivers when they are caring for loved ones with terminal or severe chronic illnesses
- Hospice Care
- Skilled nursing care facilities
- Residential care facilities for the elderly (different from skilled nursing facilities in that they don’t provide medical care)
- Continuing care retirement facilities and other retirement home communities
How much does Long-term Care cost?
The costs of Long-term care depends on the area you live in and the type of services needed. In California, for instance, today’s median annual cost for various types of long-term care services currently are:[2]
- $52,624 for home health aide services
- $48,000 for care in a residential care facility for the elderly (RCFE)
- $91,250 for a semi-private room in a skilled nursing facility (SNF) Keep in mind that these are the amounts needed to pay for care today
- These costs are rising rapidly at an annual compound rate between 2-5 percent inflation.
As one can see, the cost of long-term care expenses can be catastrophic to one’s financial situation.
What options do I have to self-insure for Long-term care?
- Stand-alone policies that provide long-term care insurance only, or provide long-term care benefits as a rider to another policy like an annuity, life insurance, or critical illness contract
- Group long-term care insurance (Check the group LTC insurance “Certificate of Coverage” to understand the benefits and insured’s rights under the plan)
- LTC insurance premiums paid by the employer on behalf of the employee are 100% tax deductible, and the employee can exclude 100% of the premiums paid from their gross income.
Additional Resources:
Cost of Long-term Care expenses
https://www.genworth.com/about-us/industry-expertise/cost-of-care.html
2016 CA Dept of Insurance Long-term Care Rate & History Guide
http://www.insurance.ca.gov/01-consumers/105-type/95-guides/05-health/01-ltc/index.cfm
There are additional state-run programs designed to help people remain in their home and receive care rather than having to enter a residential long-term care facility. In California these agencies are:
- Multipurpose Senior Service Program (MSSP)
- In-Home Supportive Services (IHSS)
- Program of All-Inclusive Care for the Elderly (PACE)
- California Association of Area Agencies on Aging (C4A)
[1] From U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information Web site, www.longtermcare.gov
[2] https://www.genworth.com/about-us/industry-expertise/cost-of-care.html
