A note to seniors: Long term care insurance is worth investigating
By Cris Bates Carter
Genworth Financial Long Term Care Division
Today’s seniors enjoy a life expectancy longer than any generation in history. An American who turned 65 in 2000 could expect to live nearly another 18 years beyond their 65th birthday[1]. And while additional years are generally considered a blessing, it may also be true that, as people age, chances increase that they may develop a chronic condition or physical or cognitive inability for which they will require assistance. Today’s seniors, who often consider themselves among the best informed, would do well to learn more about three crucial areas that pertain to their future health care needs: the potential that they’ll need long term care, the cost of long term care, and the limitations in the federal and state aid available.
According to a study by the Agency for Health Care Policy and Research, some 42 percent of Americans who reach the age of 70 will need some form of long term care during the remainder of their lives[2]. And with the number of people over age 65 today, the demand for long term care services is poised to increase dramatically.
Long term care services have evolved dramatically over the past several years. Where the majority of long term care was once provided only in skilled nursing homes, long term care services today are provided in a wide range of settings, ranging from in-home care to community-based facilities such as adult day care and assisted care facilities to nursing homes. The cost of long term care can be significant, regardless of the setting in which it is provided. The average cost of a year of care in a skilled nursing home for a private room is $69,400 and home care costs can range from $50 to more than $200 a day.[3]
Generally, Medicare and Medicaid provide only limited help for nursing home care. Medicare only pays for the first 20 days in a skilled nursing facility – and only after a hospital stay of three days or more. Government isn’t expected to help much with newer forms of long term care services, either. Despite recent changes to allow for coverage of some prescription drug costs, Medicare will not pay for long term stays in a nursing home or an assisted living facility.
Long term care insurance coverage can help in many ways. It can help seniors protect the assets accumulated over a lifetime from being eroded by the costs of long term care. And it can be beneficial even to the most successful saver or investor.
Finally, there’s the knowledge that, if one needs long term care, with long term care insurance seniors may have more choices about where they receive covered care, that they will have funds to help pay for that care, and that the responsibility for providing care will not fall entirely to their family. These choices can also help preserve financial independence, and that can be priceless.
[1] Centers for Disease Control and Prevention, National Center for Health Statistics; http://www.cdc.gov/nchs/fastats/lifexpec.htm, Health, United States, 2002, Table 28 viewed 10-15-03
[2] “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
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