According to the U.S. Department of Health and Human Services, about 70% of Americans ages 65 and older will eventually need some type of long-term medical care and support. In addition, a fifth of individuals who need long-term care will require this level of treatment for at least five years.
Planning for the cost in advance can reduce the stress involved with seeking long-term care for a family member.
The average cost of care
USDHHS data estimates a national average cost for long-term care as follows:
- $7,698 per month for a private room at a nursing home
- $6,844 per month for a semiprivate room at a nursing home
- $3,628 per month for care at an assisted living facility
- $68 per day for adult daycare in a medical setting
- $20.50 per hour for a home health aide
Individuals who do not qualify for Medicaid can pay privately for these services. Some families purchase long-term care insurance, sometimes bundled with a life insurance policy. Homeowners who have equity may opt for a reverse mortgage to pay for long-term care costs.
Medicare and Medicaid coverage
While seniors receive Medicare, it pays only for skilled and rehabilitative long-term care. It does not cover the cost of activities of daily living, which is a significant expense associated with long-term care. While Medicaid may cover ADLs, applicants must fall below the income and asset thresholds for the program.
Medicaid planning can help individuals who may eventually need long-term care spend down their assets so they can qualify for the medical support they need during the aging process.