Long-Term Care: Three Vital Things You Need to Know

Long-Term CareHey Boomer!  You’ll be well served to know three things about long-term care:  1) how much the care costs, 2) how likely you are to need it, and 3) and how much the insurance costs that pays for the care.   It’s all here.  It’s all been calculated.  Hang on tight, savvy Boomer.  

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My mother-in-law’s descent into dementia was so soft and so gentle that we barely noticed. 

By the end, the ravages were so virulent, her loving husband of 60 years was forced to concede defeat.  Heartbroken, he placed her in a nursing home.  With each daily visit, he’d reintroduce himself.

Fortunately, his teacher’s pension was able to defray some of the costs.

Bulletin:   In today’s world, you’ll have to be more strategic than to rely on a teacher’s pension if you’re going to adequately fund long-term care expenses.   

And to be strategic, you need to know what you’re facing.  

Here are the relevant facts about long term care you need to know. 

(I’ve included sources and sites where you can plug in your own information and get up-to-date information for your personal situation.) 

four-way seat beltFasten your seat belt.

#1.  How much does long-term care cost? 

Boomer, here’s cost information from a 50-state survey in 2016—the most current data available at press time. (See cost data for your own state here.  Project your own long-term daily, monthly, and yearly costs here.

These costs are important because they generally are not covered by your health insurance or by Medicare.  (Shocking, I know.)

Median National Cost of Long-term Care Annually.

Home Health Care Median Lowest Price Highest Price
Homemaker Services1 $45,760 $36,608 $59,488
Home Health Aide2 $46,332 $37,752 $63,972
Adult Day Health Care      
Adult Day Health Care $17,680 $7,150 $28,080
Assisted Living Facility      
Assisted Living Facility $43,539 $30,438 $80,400
Nursing Home Care      
Semi-Private Room $82,125 $52,925 $292,000
Private Room $92,378 $61,663 $297,840

1Based on 5 days per week 52 weeks
2Based on 44 hours per week 52 weeks.
Source:  Nationwide survey commissioned by insurance provider Genworth Financial, Inc., 2016. 

 

#2.  What’s the likelihood that you’ll need long-term care?

Yes or No Two Dice RollingFrom the most current data available at press, a 2016 report published by the Urban Institute and the Department of Health and Human Services, projects that:

  • 47% of men and 57% of women will need long-term care at some point.
  • On average, men will require 1 ½ years and women will require 2 ½ years of long-term care.

Here are the percentage break-downs showing who needs more and who need less long-term care.  

Women Are More Likely than Men to Need Long-Term Care and They’ll Need it Longer.

Length of Care Needed Male Female
5+ years 9.8% 17.8%
2.0 – 4.9 years 11.1% 12.3%
1.0 – 1.9 years 7.4% 8.1%
Less than 1 year 18.4% 19.4%
No care needed 53.3% 42.5%
Average length of care 1.5 Years 2.5 Years

Source:  Dept. of Health and Human Services, Long-Term Services and Supports for Older Americans,, Revised 2016.

Woman shocked looking at billAnd there it is:  the most disturbing fact.  Nearly 10% of men and almost 20% of women will need more than five years of long-term care.  That’s going to cost you.

#3.  How much are long-term care insurance premiums?

Boomer, you can’t look at the price of premiums without knowing what that price buys you.  Keep this in mind if you talk to an insurance agent.  The policy shown in the table below: 

  • Kicks in after a 90-day waiting period (called the “elimination” period.) 
  • Insures you for $300 a day.
  • Has a 3% compound inflation inclusion so that each year your policy covers you financially for 3% more than it did the previous year.  (It’s important your policy have this!)
  • Provides long-term care for 3 years only–the standard “affordable” length of care offered by companies.

One Insurer’s Annual Premiums for Long-Term Care1,2

  Unmarried Married
Age At Policy Purchase Male Female Male Female
50 $4,374 $6,816 $3,060 $4,770
55 $4,746 $7,518 $3,324 $5,262
60 $5,292 $8,532 $3,702 $5,970
65 $6,192 $9,834 $4,332 $6,882
70 $8,244 $12,132 $5,772 $8,490

1Data is from the State Farm website, the only company I could find that doesn’t force you to talk to a salesperson in order to get a quote. 
2I have no long-term care policy with State Farm.  This table is not an endorsement. 
Source:  State Farm “Long-Term Care Quote” website, September 18, 2017. ( Click “long-term care”– may take more than one try.)

Check out this website to see price premiums for the specific coverage you desire in your state.  Plug in your state on the right side of the page. 

This was the only website I could find that gave you a quote without first requiring you to speak with a salesperson.  The website is a little buggy.  You might have to click it once or twice to make it work–but it seems to always come through after a little persuading.

*Use this information to negotiate with other insurers who sell long-term care policies.*

(Again) force the salesperson to be consistent across the first four bulleted items listed above the table.  You want to compare apples with apples.

You’ll also notice from the table above that:

  • The later you buy, the more you pay.  
  • Married people pay less than singles because companies plan on selling a policy to each of you.
  • Women pay the most because statistically they live longer.  

When you look at these prices, remember that long-term care is not covered by your health insurance or by Medicare.    

What should you do?

You have options, Boomer.  In upcoming columns, we’ll discuss cost effective ways to protect yourself, play the odds, and still not break the bank.  We’ll discuss realistic strategies for self-insurance.  If you think you should buy a policy, we’ll discuss how to get the premiums lower while still protecting yourself.  

Until then, Boomer, take good care of yourself.  Your bank account and heirs will thank you.