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Understanding the Costs of Long-Term Care

Knowing how you are going to pay for the care you may need in the future is perhaps the most important part of long-term care planning. There are many ways to pay for care, and you should decide what financial plan works best for you. How much do you know about the different sources of financing? And how prepared are you for the costs that may be involved? Here are a few facts about Long-Term Care that you should keep in mind:

  • A person needs long-term care when they require ongoing help with day-to-day activities such as bathing, dressing or eating. These are called Activities of Daily Living (ADLs) and as we age or have chronic health conditions, our ability to do these tasks without help from another person can be limited.
  • Most people receive long-term care at home. This might be provided by family or friends, called informal caregivers, or from paid care providers like a home health aide or homemaker, or with a combination of these resources.
  • A semi-private room in a nursing home in the DC area costs $210/day (2009) so a year of care would cost over $75,000.
  • A four-hour visit from a home health aide in the DC area costs about $80. A home health aide would provide help with personal care activities, managing medications and some meal preparation or other homemaking tasks.
  • For someone turning age 65 today, the average chance that they will need long-term care at some point in their lifetime is 70%. Some people may need care only for a short time but just under 30% of people who need care need it for 5 years or longer.
  • Most of the long-term care costs for the typical middle-income family are paid for by the families themselves. Medicare only pays for short-term, skilled recuperative care and Medicaid only pays for long-term care once someone has limited income and assets.

Long-Term Care Costs Vary According to the Services Needed

The costs of long-term care outside one’s own home has probably shocked you. Costs can be even higher than the average costs provided if skilled nursing (for example, wound care) or therapy (for example, speech or physical therapy) is needed in addition to long-term care support services (such as homemaker or personal care).

Long-term care services provided in the home are less expensive than nursing facility care because family members provide much of the needed services for free. This “free” care is not really free, of course. Caregiving can take a great deal of time and put considerable emotional and physical stress on the family member(s) who provide the care. Providing long-term care for family members at home over an extended period has been shown to harm the health of the major caregiver. The growing stress over time can even shorten the caregiver’s own life.

Because there are so many kinds of long-term care services, and because the costs of different services vary, you need to look carefully at all the services offered and the expense of each as you plan for future care needs. You must also keep in mind that the prices you are quoted when you plan will probably increase (due to inflation) by the time you actually need the services.