The Cost of Long-Term Care
Long-term care can be received in a variety of settings. The setting is usually determined by your support system (your family, attending physician, or someone qualified to develop a plan of care) that you have and the reason that you need long-term care. Some needs can easily be taken care of at home, while others would be better cared for in a nursing home.
Here are Four Options To Pay For Your Long-Term Care
- You can rely on others (spouse, children, etc) to provide the help needed. This option is only available to those with a support system in place and if the amount and type of care required is possible for them to provide.
- You can self-insure and pay for your own long-term care with your own assets and income.
- You can spend down all of your assets and then qualify for Medicaid. (Medi-Cal in California).
- You can transfer a predetermined amount of risk of long-term care to an insurance company by purchasing long-term care insurance.
As you can see from the chart below, the cost of nursing home care can vary from close to $100 per day in the lower cost areas to almost $300 per day in a higher cost area. To summarize, the cost of nursing home care nationwide will run anywhere from about $36,500 to $109,500 per year (depending on where you live).
What will the future cost of long-term care be?
When planning for your future long-term care expenses it is important to not only note what the cost of care is today, but what it will be in the future. According to the General Accounting Office (1991), the annual cost of care is growing by 5.8% per year. This means that in 20 years the cost of long-term care is expected to triple. So if you are 60 years old today, you needed care at age 80, and you lived in an area where the annual cost of care is $54,385.00, the cost in 20 years would be $167,954.83. Imagine what your future expenses will be if you live in a higher cost area!
Ancillary Costs
Besides the normal daily rate that a nursing home will charge you, or the hourly rate that a home care agency will charge you - there are always going to be ancillary costs you should plan for. In a nursing home, additional expenses could be diapers, laundry, medications, and other incidentals. In your home, there are additional expenses like safety devices (i.e. grab bars near the bathroom and toilet, and maybe a ramp for the stairs).
Human Costs
If a family member decides to provide the care rather than paying a professional, there are many human costs besides financial costs to consider. Your family may or may not be aware of these, or be prepared for them. If your plans are to save the expense of paying someone to care for you and rely on a family member instead, you need to consider the costs that they will pay - financially, physically, and emotionally. It is not unusual for the care-giving spouse to predecease the spouse being cared for, due to stress.
“26.6% of the adult population has provided care for a chronically ill, disabled, or aged family member or friend during the past year. Based on current census data, that translates into more than 54 million people.”
Source: National Family Caregivers Association Random Sample Survey of 1000 Adults, Summer 2000
- Financial Costs:
When you rely on family members to take care of you, it is important to consider the financial costs they will incur. They may be more than willing to take care of you, but may be unaware there will probably be a financial loss to them. The financial loss to them could be very high. If they currently work, they may need to work fewer hours, or even give up their jobs altogether.
A 1999 MetLife Study reported “care giving costs an (individual) an average of $656,000 in lost wages, pensions, and Social Security, not to mention negative health impacts.”|
- Physical Costs: Providing long-term care is hard work. Family members report exhaustion from the long hours of care giving. If you had a stroke and could not bear your own weight it would be very difficult, if not impossible, for a family member to lift you in and out of bed. Especially if your caregiver is your spouse and you are both in your 80’s! If you have Alzheimer’s and require 24-hour care, it can be very exhausting for a family member to stay up all night and during the day. Your family caregiver couldn’t do that for too many days in a row!
- Emotional Costs: The emotional toll caregivers experience is another cost your loved ones pay in providing care to you. If you are relying on a family member to take care of you, it is important to understand the type of care you may be asking them to provide. You may be thinking that the extent of the care is helping you in and out of bed, assisting you with meal preparation, or driving you to the doctor. But, what if you need more care than that? Will it be possible for the friend or family member to handle more extensive care?
Children can become clinically depressed while taking care of their parents. Sixty-one (61%) of “intense” family caregivers (those providing at least 21 hours of care a week) have suffered from depression. Some studies have shown that caregiver stress inhibits healing.
Source: National Family Caregivers Association, Long Term Care (Caregiving Across the Life Cycle) 1998
