US News and World Report
Out of your pocket. Medicaid. Other options are long-term care insurance and a reverse mortgage
By Michelle Andrews
Posted March 11, 2009
Who looks forward to living in a nursing home? Few people build the possibility into their financial planning, an understandable lapse but unwise in the long run. Even if they did, the cold fact is that the options available to pay for long-term care, whether it's a nursing home, an assisted living facility, or home care, are limited and too often unaffordable.
Still, it is a harsh reality that about 70 percent of 65-year-olds will need long-term care at some point, according to a study conducted by researchers at Penn State, Georgetown, and the Lewin Group. Of that group, about 30 percent will need it for more than five years. That's extreme—the average long-term stay is about 2½ years. But it's expensive even for short-timers. The average daily rate in 2008 for a semiprivate room was $191 last year, according to MetLife Mature Market Institute's annual survey of nursing homes. Do the math. The sum comes to about $70,000 a year.
Other long-term care options are less onerous but will still wreck many fixed incomes. Assisted living facilities, where people who don't need skilled nursing care can get help with essential but routine chores, are much less expensive, averaging $36,372 annually. For those who can stay put, the services of a home health aide typically cost $20 an hour. Adult day care, another option that can allow someone to continue to live at home with family, costs $64 per day on average, according to MetLife.
Medicare isn't an option for truly long-term care. Coverage of skilled nursing care is limited to 100-day benefit periods and requires at least three days of hospitalization before being admitted to a home. It's fine for someone who's just...
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1 comment:
It has been mistakenly called "nursing home insurance". Less than 37% of claims on long term care policies are for nursing homes. More than 63% of claims are for home healthcare and community care.
The funny thing about long term care insurance is that the price of a policy can vary a lot from one insurance company to the next. Each long term care policy has a different way of charging premium based upon health history, marital status, choice of benefits, and even state of residence. It pays to shop.
What most people don't realize is that group long term care insurance policies are usually more expensive and have less benefits (particularly less benefits for home healthcare) than individual policies. It pays to shop and compare all types of insurance, but especially long term care insurance.
Scott A. Olson
www.LTCInsuranceShopper.com
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