Long-Term Care: Why We Fail to Plan

Long-Term Care Planning in the U.S.

Most Americans do not know the facts surrounding their potential need for long-term care and the costs associated with it.  This was reconfirmed recently in a telephone survey of 1,735 Americans over the age of 40, funded by the SCAN Foundation and conducted by the Associated Press (AP) – NORC Center for Public Affairs Research (“survey”)[1].   This survey highlights the main misconceptions Americans have about long-term care, including: the potential that a loved one may need some sort of long-term care within the next five (5) years; lack of understanding of coverage of long-term care services by Medicare, Medicaid and private insurance; and an increase in lack of concern over failure to plan for the costs associated with long-term care.

Who Will Need Long-Term Care

According to the Genworth Cost of Care Survey of 2015 (“Genworth Survey”)[2], seventy percent (70%) of Americans over the age of sixty-five (65) will eventually need some type of long-term care.  In addition, by the year 2040, twenty-two percent (22%) of the population will be over the age of sixty-five (65), which is a ten percent (10%) increase from the year 2000.  Yet, this survey showed an increasing number of people over the age of forty (40) refusing to believe they will ever need long-term care.

Cost of Long-Term Care

The study showed a lack of understanding by many of coverage for long-term care by Medicare.  The truth is that Medicare does not pay for ongoing long-term care (although it will pay for intermittent stays at nursing facilities).  Yet, thirty-four percent (34%) surveyed thought Medicare would pay for long-term care while twenty-seven percent (27%) were unsure.  Furthermore, Medicare doesn’t typically pay for care in the home.

Medicaid is the largest payer of long-term care services.   Medicaid is a federally and state funded needs-based benefit that will provide for various types of long-term care depending on the state’s regulations.  In 2013, Medicaid paid for fifty-one percent (51%) of the national long-term care bill totaling $310 billion.  However, fifty-one percent (51%) of Americans age 40 and older reported that they don’t expect to have to rely on Medicaid to help pay for their ongoing living assistance expenses as they age.

The actual costs for long-term care are staggering.  The Genworth Survey reported that, nationwide, the average bill for a nursing home is approximately $80,300 and for home health care, approximately $44,616 with a variety of options among and in between these levels of care.

Most Americans are unprepared for the costs associated with long-term care.  For example, the results of the survey showed that only one-third of adults were “very or extremely confident” in their ability to pay for long-term care.  Fascinatingly, while many individuals reported being concerned over leaving family with debt or becoming a burden on loved ones, 66% do little to alleviate their concern in the way of planning.

Although not a popular topic among Americans over the age of forty, long-term care is an increasingly important one.  We are in the business of providing options for people in planning for their potential long-term care needs.  If you, a loved one or a client needs help figuring out their options, please think of us.  We can help and we are always happy to hear from you.

Please call (859) 231 – 5800 to schedule a free consultation.

 

ElderCounselor

 

[1]  http://www.longtermcarepoll.org/PDFs/LTC%202015/AP-NORC-Long-Term%20Care%20in%20America%202015_FINAL.pdf

[2] https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html

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