Long Term Care Rates and Costs

What Does Long Term Care Cost?

Nursing home care is expensive: today, the national average cost of a semi-private room in a nursing home is $52,000 annually. Depending upon where you live and the type of facility that you would prefer, costs can be significantly higher. Home health care is expensive, too: the national average annual cost of home health care is well over $20,000 (that's $18/hour, five hours per day, five days a week for a home health aide). This figure is expected to climb to $68,000 by 2030. Are these costs that you could afford tomorrow?

And what if you need long term care in the future? Nursing home costs have been going up about 5% a year. If that continues for another 30 years, the cost of nursing home care (for a semi-private room) in 2032 is expected to be $190,600 a year. As you plan for the future, you should consider whether this is an expense you will be able to afford.

Cost Beyond Means to Pay

If you, your spouse or family member were to need long term care, the cost could deplete more than your own hard-earned assets. Without long term care insurance, the financial burden of caring for you could fall on your family.

You're Not Covered

You may think that long term care services are covered by your health plan or disability insurance. That's usually not the case. Health insurance is designed to cover medical care for illnesses or injuries, such as cancer, a broken arm, or a stroke. For example, it will pay the hospital bills you incur for a stroke. It won't pay for long term assistance with activities of daily living, such as dressing or using the bathroom.

As for disability insurance, it is designed to replace the income you lose if you're unable to work, due to accident or injury. Disability benefits will help you pay your mortgage or your normal household expenses. Disability insurance provides no additional benefits for long term care.

Who Pays for Long Term Care?

Ultimately, you do. Private health insurance may pay for some short-tem care in lieu of hospitalization. But it only covers nursing home services for a short recovery period.

What About Medicaid and Medicare?

Medicaid is designed to protect those with minimal assets. To qualify, many people "spend down" nearly all of their assets. In fact, because spouses have a legal responsibility to support each other, both must spend down their assets before an ill spouse may qualify for Medicaid benefits.

Medicare only pays limited amounts for skilled care following a hospital stay. It does not cover purely custodial care, the type that's required by most people in nursing homes.