The Costs of Long Term Care for Seniors

America is aging and fast. 10,000 Americans are now turning 65 every day! In all likelihood, if you're not one of them, a family member of yours is.

The question you have to ask yourself is whether you can afford it. As we live longer, do we have the financial resources to either live on our own or get the help we need, when we'll need it.

We wanted to take a look at the various costs of long term care to help you get a better sense for what you'll need to budget for as you age.

FACTORS AFFECTING THE COST OF LONG TERM CARE

Obviously, each persons individual circumstance will have a significant impact on cost. You may have family who can help with care or even bring you into their home. Or perhaps you have long term care insurance. Living in Idaho will be less expensive than living in Manhattan. Regardless, understanding the various care models and associated costs will help you prepare for the future.

COST OF LONG TERM CARE

So what are the costs of long term care? Here are a few samples to get us started, taken from a combination of Genworth's annual Cost of Care Survey and A Place for Mom's Cost of Long Term Care and Senior Living Report.

While the costs for long term care look expensive, the only way to do a true apples to apples comparison with your current living conditions, is to sum up all of your current expenses, and compare your current total cost of living to the total cost of living in one of the alternatives above.

For example, when you move into an assisted living community your food, cleaning, transportation, utility, internet, entertainment and cable costs may be covered. Comparing monthly rent alone or condo fees alone won't take that into account. So here is a comparison of living on your own in an apartment versus living in an independent living or assisted living community.

Another point to consider is whether or not aging in place will require any home modifications (stairlifts, wheelchair ramps, grab bars, railings, comfort height toilets, motion censored taps, etc...) or the purchase of specialized equipment (medical alert systems, automated adjustable bed, etc...), both of which can be prohibitively expensive.

It should also be noted that not all independent living communities and assisted living facilities include the same costs in their base monthly pricing. For example, some might include all meals, others might include 1-2 meals a day and others none. Some might include light housekeeping, others might charge extra. So please treat the above as a guide, not gospel.

When you look at the above, you realize that it's not a given that moving out of your home, will necessarily be more expensive, when you bake in all costs. Of course, many of the costs above will be different person to person, medical condition to medical condition, facility to facility and city to city. But it gives you a good framework to help you make your own total cost of living calculations given your specific situation.

WHAT IS COVERED BY MEDICARE

While the costs above may seem daunting, there is some good news. Many home health services and short term nursing home stays requiring skilled nursing are covered by Medicare. That said, if you or a loved one need assistance with activities of daily living like meals, toileting and bathing or home maker services like meal preparation, laundry and light housekeeping, you'll likely have to pay out of pocket or find an alternative to Medicare.

So what is covered by Medicare? Here goes:

• Only "part-time or intermittent" home health care coverage is available. Not 24 hour care.
• Your cost are $0 for home health care services
• A doctor or nurse must certify your need for home health care
• You must require medically necessary part-time or intermittent skilled services AND be home bound
• Covered home health services include:
  • Physical therapy
  • Occupational therapy
  • Speech-language pathology services
  • Medically necessary part-time or intermittent skilled nursing care, like:
    • Wound care for pressure sores or a surgical wound
    • Patient and caregiver education
    • Intravenous or nutrition therapy
    • Injections
    • Monitoring serious illness and unstable health status
  • Part-time or intermittent home health aide care (only if you’re also getting skilled nursing care, physical therapy, speech-language pathology services, or occupational therapy at the same time), like:
    • Help with walking
    • Bathing or grooming
    • Changing bed linens
    • Feeding

WHAT IS NOT COVERED BY MEDICARE

So what does the above NOT cover. Here's a list:

• 24 hour a day care
• If you're not home bound, meaning you can make it to an appointment or clinic, you're not eligible
• Assistance with daily living like bathing, toileting, eating and getting dressed, if that's the only care needed
• Homemaker services like meal preparation, house cleaning, laundry and grocery shopping
• Home meal delivery

Although there are options for Alzheimer's patients to get some home health care, it should be noted it won't include assistance with activities of daily living like feeding, bathing and toileting.

BEST WAY TO AVOID LONG TERM CARE?

That said, one of the best ways to reduce the probability of requiring long term care, is to avoid it in the first place by increasing your healthspan - living healthier longer, and avoiding chronic disease. Lots of research has gone into how to increase health span, which we won't get into here, but some of the keys are sticking to a healthy diet, staying active, getting quality sleep, having an active social life, having purpose, avoiding smoking and limiting alcohol consumption.

KEY TAKEAWAYS

Long term care is expensive. It's not clear that hiring professional in-home care while aging in your own home is necessarily cheaper than moving into a long term care facility. It can be, but not necessarily so. Each situation will be different. While medicare will cover many costs, it will not cover all home care costs.

As a result, you should start putting some thought into how you will organize and fund your future long term care needs, whether it be through insurance, savings, retirement income, family or otherwise. Hopefully the numbers above give you some idea of what you'll need to prepare for. Let us know your ideas on preparing for the future, we'd love to hear from you!