Will You Need Long-Term Care Services?

Planning for Long-Term Care Costs as You Age Part 1

IMPORTANT NOTE: It is essential for you to know that I am a licensed insurance with more than 40 years of experience specializing in the healthcare needs of people ages 65 and older.

Long-term care expenses are one of the biggest worries for retirees. And it is easy to understand why this is such a huge concern. Those of us who have entered this last chapter of our lives are bombarded with articles proclaiming that we will need at least $350,000 for medical costs. In addition, we have been hit over the head with this statistic:

70% of people turning 65 years old will need long-term care at some point.

That is a terrifying statistic. But let’s take a closer look at this 70% statistic.

What Does Long-Term Care Mean?

When you hear the words “long-term care,” you probably think of nursing homes and assisted living facilities. But long-term care is a much broader concept.

In general, long-term care services fall into two categories. Long-term care is either community-based or facility-based care.

Community-based care includes:

Adult Day Care Services

Senior Centers

Transportation Services

Meals Programs

Respite Care

Community-based care is services that make it easier for an individual to remain at home rather than become an inpatient in a nursing home or assisted living facility.

Facility-based care includes:

Adult Foster Care

Board and Care Homes

Assisted Living Facilities

Nursing Homes

Continuing Care Homes

The list above shows many long-term care options that will be significantly less expensive than becoming an inpatient in a nursing home or assisted living facility.

There is no doubt that your personal preference would be to remain in the home for as long as possible should you need long-term care services. In fact, most people prefer to stay in their homes, if possible.

Where is Care Received, and How Much Does It Cost?

So, if most people prefer to receive care at home, where is care actually received?

As it turns out, 65% of people needing long-term care receive that care at home.

Only 35% of people receiving care will be an inpatient in a nursing home. To put that in perspective, let’s look at some math.

70% of people ages 65 and older will need long-term care multiplied by 35% in nursing homes = 24.5% of people will utilize nursing home care.

So, as far as planning for long-term care expenses, only 24.5% ( 1 out of 4) will receive care in a nursing home.

But upon taking a deeper dive, we find that only 4% of seniors currently live in a nursing home, and only 2% live in assisted living. This tells me that my most significant financial concern should be how I will pay for care at home should I need it.

It also tells me that I do not necessarily need to plan on paying $8145 a month for nursing home care, which is actually a good thing because there is no way that I could afford that! That is not to say that nursing home costs should be ignored. But for most people, focusing on nursing home costs will present an insurmountable obstacle.

Home care services can include homemaker services, home health care aide services, and professional services such as a nurse.

In Arizona (where I live), the median cost of homemaker and home healthcare aide services is $20 per hour. The services of a licensed nurse will be significantly higher, but the frequency of their use is also considerably lower.

Homemaker Versus Home Healthcare

Homemakers clean, do laundry, prepare meals, and take care of other tasks that seniors can no longer accomplish on their own.

Home health aides assist seniors with activities of daily living, such as eating and bathing.

Generally, insurance will not pay for homemaker services, while home healthcare services are covered.

Something to Think About

Since we know that most Seniors receiving long-term care receive it at home, it should be evident that this is the first piece of long-term care planning that must be dealt with.

As it turns out, 59% of those seniors receiving care at home receive it from unpaid family caregivers.

First, you should consider whether you are comfortable leaving your care to a family member as opposed to using a paid caregiver.

If you are married, you cannot assume your spouse will be your caregiver. It is possible that your spouse may predecease you or may be physically unable to provide the care needed.

Should you not want to rely on family and friends, you will need a plan for how to pay for more professional care. In another article, I will take a deeper dive into the various ways you can handle paying for care, but for now, simply recognize home care is what you want, and it is far more affordable than being an inpatient.

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