What does it cost to obtain care?

Today the cost of care in a nursing home averages around $75,000 per year nationally, or a little over $172 per day. The U.S. government's General Accounting Office predicts that these costs will more than double in the next ten years. Over the next 20 years, they are expected to rise above $240,000 per year, hiking the per diem rate to more than $660. Projections for 2030 (tail end of baby boomer generation retiring), the cost is projected to be $325,000 OR MORE annually!

Assisted living facilities generally run 60-80% of the cost of a nursing home. However, assisted living can run as high as or more than other types of facility care depending on the needs of the client (for example, those with moderate to severe dementia would be charged higher rates).

Minimum charges for homecare by an independent sitter start at around $15 per hour. Caregivers obtained through home healthcare companies or other such agencies typically average $20 per hour or more and have a four-hour minimum. Licensed personnel are typically more costly. So, you can see that an eight-hour shift of home care would be equivalent to a 24-hour stay in a facility.

What does Medicare cover?

After hospitalization, Medicare may pay for skilled medical services to help those who are recovering (i.e., attempting to regain prior functional levels). Medicare payments are limited to the first 20 days of skilled services in a nursing facility. From the 21st day through the 100th day, ongoing payment by Medicare and one’s Medicare supplement depends on the degree of progress toward rehabilitation exhibited by the individual, based on strict government guidelines. If the patient reaches a plateau prior to the 100th day, the Medicare and Medicare supplement payments will cease and the individual will begin accumulating out-of-pocket expenses.

In a home setting, Medicare will pay for a limited amount of personal assistance for up to 3 weeks per episode of illness. A good example is for personal help after a hip or knee replacement. Medicare does not pay for ongoing assistance, only for required skilled care (according to the Medicare definition of skilled care) provided by a licensed health care professional on a daily basis.

Medicare pays nothing for the cost of an assisted living facility nor does it cover the cost of custodial care at home or in a nursing facility.

For more information, Contact Us.

We will be happy to send you the 2007 Guide to Health Insurance for People with Medicare, published by the Health Care Financing Administration, the Federal Medicare Agency. To get the information on your own, go to www.Medicare.gov.

Doesn’t Medicaid pay for long term care?

Medicaid is a joint state and federal program that helps pay for health care for people with limited income and resources. Programs vary from state to state. Guidelines for Medicaid eligibility include:

• You must have no income or assets
• If you have a spouse, he or she may keep limited assets and a house
• The program can recover expenses from your estate after the spouse’s death

When you need long term care, have no assets of your own and qualify for Medicaid, you have no choice of the facility where you receive care. You are placed wherever there is room available for you. Accommodations are never private and, in some cases, your room may have more than one other occupant.

Isn’t my disability insurance supposed to cover my long term care needs?

Many people believe that disability insurance is the way to cover their costs for care after some sort of catastrophe. Most disability income insurance products on the market today are limited to payments of 60% of one’s salary and only up to the age of 65. Disability income insurance is designed to pay living expenses for policyholders, not the higher cost of extended care services.

I've heard long term care insurance called "nursing home insurance."
Are they one and the same?

Actually, less than 20% of those receiving long term care services are in nursing homes. The other 80% are receiving care either at home or in an assisted living facility. Most long term care insurance policies offered today are designed to provide care at home for as long as possible.

What are the chances that any one person will need long term care?

According to the Health Insurance Association of America, the odds are greater than 50% that the average person will need some type of extended care (the anticipated need for personal care services for at least 90 days) during his or her lifetime.

How much does long term care insurance cost?

Long term care insurance costs less than medical insurance. The actual cost is dependent on age, health status and the amount of coverage selected. Each long term care policy is tailored to the individual’s goals and needs. Premiums for coverage range from a low of several hundred dollars a year to several thousand dollars per year.