Presented By: Kenna M. Ulbinsky-Yakal

It’s getting harder to avoid the topic of long-term care (LTC) these days. Almost everyone knows someone who has received long-term care services, along with a story about its unexpected high cost. This has caused concern over what our own long-term care needs might be and for good reasons.

First, we’re getting older. The longer we live, the greater the risk of requiring some form of long-term care services. After the age of 65, Americans have more than a 70% chance of needing some form of long-term care.(1)

Second, with improvements in healthcare, sudden death from acute diseases are less likely. The chance of incurring a debilitating disease that may require long-term care has increased.

No doubt, as the baby boom generation continues to age and live longer, the system may strain to deliver the needed services. As demand outstrips supply, costs can only be expected to rise.

What is LTC?

Long-term care encompasses a broad spectrum of services for individuals suffering from chronic illness; including assistance with basic everyday functions, household chores, or life management also known as Activities of Daily Living (ADL):

• Bathing – turning on faucets, washing and drying the whole body
• Dressing – getting clothes from the closet, dressing self, including fasteners
• Toileting – moving self to and from the bathroom, arranging clothes, cleansing self
• Eating – getting food and drink from a container into the body for nourishment
• Continence – maintaining control of bowel and bladder function

How much will it Cost?

Some of our shared concern centers around cost. Nursing home care is by far the most expensive, with annual costs around the country averaging $74,000 per year in 2006.(2)

Many mistakenly believe that Medicare or Medicaid will pay for our LTC needs.

However, the inescapable conclusion is that neither Medicare nor Medicaid is an ideal solution for long-term care. Medicare is targeted primarily at acute care and Medicaid is generally only available to those living below poverty level, or those who are medically disabled and have to spend themselves into poverty.

Some believe they can rely on their own personal resources to pay for their long-term care needs. However, many underestimate the cost and can end up using savings or assets they have built up over a lifetime.

Another Option: Long-Term Care Insurance

Instead of depleting their assets, relying on the government for help, or burdening loved ones, many are turning to long-term care insurance to help cover these costs if a need arises. This type of policy covers services such as nursing home, assisted living, home care, and adult day care.

If you believe you’re too young to begin thinking about long-term care, consider that many people who require long-term care are working-age adults between the ages of 18 and 64. Plus, the premiums for long-term insurance are much lower the younger you are when you purchase the policy.

A licensed financial services professional can help you determine whether you need long-term care insurance, how much, and how to pay for it.

1. Living long has its benefits, and its costs, San Diego Daily Transcript. Sept. 26, 2003.
2. Prudential Financial’s Long-term Care Cost Study, 2006.
Availability of long-term care insurance varies by carrier and state.