Many people don't understand what long term care is, don't understand the odds that they may need it some day, don't know how much it can cost, and don't know the options available to them.
What is long term care?
Unlike medical care, long term care is not primarily intended to cure a medical condition and restore normal functioning. Instead, it focuses on coping with a person's reduced level of functioning over an extended period of time, sometimes indefinitely.
Commonly, that means an individual needs assistance with what are called Activities of Daily Living, such as bathing, continence, dressing, feeding, toileting, and transferring.
I'm not old enough to be concerned...or am I?
Anyone of any age can need long term care. However, the likelihood that any individual will need long term care increases in the Golden Years. According to the federal Agency for Health Care Policy and Research, it's estimated that some 42 percent of Americans who reach the age of 70 can expect to utilize some type of long term care[1].
Does that mean going into a nursing home?
Years ago, "long term care" usually meant "nursing home care." No longer. Today, most long term care is provided in the person's home, either by family or friends (called "informal caregivers") pressed into duty by the circumstances, or by paid health care professionals who visit the home to provide care.
Long term care is also delivered in other settings, including assisted living facilities or community-based facilities like adult day care centers.
Finally, the most intensive care is still delivered in skilled nursing homes or special care facilities like Alzheimer's units.
How much can it cost?
That varies depending on the type of care, the type of facility in which it's delivered, and the area in which the individual lives.
However, nursing home costs have historically provided a benchmark. A recent survey commissioned by Genworth Financial's Long Term Care Division showed that the average nationwide cost of a year of skilled care for a private room in a nursing home facility is $69,400[2]. Depending on where you live, those costs could be very different. Nursing home care in New York City averaged $133,663 a year (private room), while such care in Louisiana averaged $44,614 a year. At those rates, it's easy to see how long term care costs could deplete the assets accumulated over a lifetime.
But I have health insurance...
It's a common misconception that long term care is covered by health insurance. In fact, most health care insurance policies do not cover long term care costs. Generally, neither does Medicare, except under very specific circumstances, and following a qualifying hospital stay. And Medicaid, the Federal program for the needy, won't help until one has exhausted almost all their assets.
How can I make sure I've prepared properly?
Here are some ways. You can consult with your financial planner, you can meet with an insurance agent who specializes in long term care insurance, you can educate yourself through independent research and online resources.
However you choose to do it, you owe it to yourself and your family to make yourself "long term care aware."
[1] "Investing in Retirement-Long Term Care-Shelter from the Storm: Why more people in their 40s are buying nursing home insurance."Barron's 03/22/04
[2] Genworth Financial 2005 Cost of Care Survey, conducted by the independent research firm of CareScout and issued May 25, 2005