Medical care or personal assistance provided by a caretaker or a facility for a period of weeks or months (or longer) is Long-Term Care. Neither the level of care nor the length of time is subject to exact definition. “Long-Term Care” refers instead to the condition of extended or permanent dependence on care from another.
Long-Term Care can be provided in nursing homes, adult family homes, assisted living facilities, congregate living arrangements, adult day care centers and in a person’s own home or apartment. This list of Long-Term Care settings is arranged roughly from more restrictive to less restrictive settings, though seriously impaired individuals might be cared for at home in surroundings that mimic more institutional settings, and some institutions (especially adult care homes) may be homelike and inviting.
How Much Does Long-Term Care Cost?
The cost of Long-Term Care varies widely by geographic region, level of care and individual facilities and caretakers. Costs vary tremendously, with larger metropolitan areas and eastern states generally seeing higher costs than smaller communities in the south and west. In Washington, the average statewide rate for skilled nursing is $9,038 as of January 2017, according to Medicaid. In practicality, however, the rates charged often are $10,000 to $12,000 per month.
Adult family homes and assisted living facility typically charge about half of the skilled nursing rate. The actual cost is dependent upon the care provided and the facility. Care in the home may be the least expensive or most expensive, depending upon the level of care needed.
Who Pays for Long-Term Care?
Care provided by family members without formal payment accounts for the largest share of Long-Term Care provided. More formal Long-Term Care arrangements in the home and in institutions are paid for by the person’s income and savings, Long-Term Care insurance, and government benefits, such as Veterans benefits, and Medicaid.
Medicare does not pay for Long-Term Care, except for a limited exception of up to 100 days of rehabilitation. Medicare limits its Long-Term Care benefit in skilled nursing facilities to exclude “custodial care”. Thus Medicare pays for rehabilitation services, such as physical therapy, occupational therapy, and speech therapy, but not for facility costs if rehabilitation care is not being provided.
What Insurance Programs Pay for Long-Term Care?
Long-Term Care insurance will pay for nursing home, assisted living or home care in accordance with the terms of the individual insurance contract.
Long-Term Care insurance is an insurance product designed to protect against the high cost of nursing home and community-based care. When an individual becomes physically or cognitively frail and is no longer able to care for himself or herself safely without assistance, home care services, assisted living, memory care, or nursing home care may become necessary. Long-Term Care insurance is designed to help fund these caregiving needs.
Why Would You Purchase Long-Term Care Insurance?
Some individuals will qualify for government assistance with the cost of Long-Term Care relatively easily (usually through the federal/state Medicaid program). Others have sufficient wealth to pay privately for Long-Term Care for the rest of their lives. Most middle class Americans, however, will want to consider Long-Term Care insurance for one or more of these purposes:
- To prevent impoverishment of the spouse who does not need care: the “well spouse”
- To protect an estate for inheritance by children or other beneficiaries
- To avoid relying upon Medicaid thus allowing greater options for care placement
- To increase the likelihood that care can be provided in the home, and nursing home placement avoided altogether
- As a person ages, he or she may reach a point, either temporarily after an illness or injury, or permanently, when he or she is unable to provide self-care without help. Depending on the person’s abilities, home care services, assisted living, memory care, or skilled nursing care may become necessary. Long-Term Care insurance is designed to help pay for these services as needed at any age, but especially for those who face the challenges of aging.