Research from the U.S. Department of Health and Human Services suggests that long-term care will be a reality for many of today’s retirees. The agency estimates that today’s 65-year-olds have a 70 percent chance of needing long-term care at some point in their lives. While a third of all seniors will never need care, 20 percent will need it for more than five years.1
Long-term care is a broad term and it is often used to describe many different services. Generally, though, long-term care is extended assistance with basic living activities such as cleaning, bathing, eating and more. While it’s often provided in an assisted living facility, it can also be provided in your home by a health aide or even family.
Many people people try to opt for home care because they want to be in their home but also because they believe home care is more affordable. That’s not always the case. A Genworth study found that a room in an extended living facility and a full-time, in-home health aide both cost $4,000 per month on average in 2018.2 Considering that care is often needed for a year or more, it’s easy to see how costly long-term care can be.
Unfortunately, many seniors fail to plan for long-term care because they think that they won’t need it or that they can simply rely on family. Many of these assumptions are born from a misunderstanding of why long-term care is needed. Below are descriptions of some of the major health issues that can cause a long-term care need and what kind of care is often required. With a better understanding of the threat, you can implement a plan and a funding strategy.
Causes of Long-Term Care
By far, the largest drivers of long-term care are cognitive issues like Alzheimer’s. Nearly 25 percent of those who need care do so because of Alzheimer’s.3 The risk of suffering Alzheimer’s is substantial. According to the Alzheimer’s Association, your risk of developing the disease doubles every five years after age 65. By age 85, almost one-third of seniors are at risk.3
Alzheimer’s may be the most common reason why people need long-term care, but it’s not the only reason. Nearly 35 percent of those who need care do so because they are suffering from complications related to a stroke, injury, circulation issues, or cancer. Nervous system issues and respiratory issues are also big factors.4 Even if you don’t get Alzheimer’s, you still may need care.
Also, keep in mind that many of these health challenges are progressive and incurable. You could live for years with Alzheimer’s, cancer, heart disease or any of the other issues. They’re likely to intensify as you get older. While you may be able to rely on family and friends in the early stages, that may not be the case as the disease progresses.
Types of Care
The type of care you receive also factors into the total cost. Not all care is the same. Many people believe that Medicare will cover their long-term care needs. Medicare may pay for some of the care, but that usually only happens if it involves skilled nursing and is focused on recovery and treatment.
Recovery usually isn’t the goal of long-term care. Very often, those who need care are beyond the point of recovery. While there may be medication involved, much of long-term care is focused on custodial assistance and lifestyle support. Long-term care aides often help with things like eating, bathing, mobility, incontinence, and basic medication needs.
Those activities usually don’t fall under the umbrella of skilled nursing, which means the care is unlikely to be covered by Medicare. If you don’t have a long-term care funding strategy, now may be the time to develop one. Long-term care insurance could be an effective tool to minimize your risk and limit your out-of-pocket costs.
Ready to develop your long-term care strategy? Contact us today at Heritage Financial North. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
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