Often one of the downsides of growing older is the stark reality of needing more medical care as we enter our 50s, 60s and 70s . The need can be as simple as taking a new medication to control cholesterol, or surgery for a new knee, or more serious treatment for diabetes, cancer or Alzheimer’s disease.
The Federal government has forecast that more than half of the adults turning 65 today will eventually require long-term care assistance with daily activities of living such as eating, dressing, and bathing. A terribly distressing statistic is the number of older parents who end up relying on their family and children for care and financial help during these times. No parent wants to place their children in that position. However, as the Baby Boomer population continues to dominate the need for long term care, the options for meeting that necessity become even more critical.
The national annual median cost of care can easily exceed $115,000 per year for a private room in a long-term care facility or $30,000 per year for five-day-per-week adult daycare services, according to Genworth Financial’s 2021 Cost of Care Survey. These and other related costs are expected to continue to rise approximately 10 percent year. The average length of stay among all nursing home residents is 485 days according to the National Center for Health Statistics.
Many people wish to be able to pass their wealth onto their children, grandchildren, and/or some type of charity. However, 66 percent of caregivers (read mostly children) of parents used their personal savings or own retirement accounts to pay for long term care costs for a loved one (read mostly older parents).
Unfortunately, many Americans continue to believe that Medicare will cover long-term care costs. Medicare will only cover 100 days of skilled care. If someone needs more than that time in a benefit period, they will need to pay personally with private funds. Medicaid, another national program, may be a less useful option for most people as it does not pay for assisted living costs and normally is not available to older adults with an income of more than $17,609 annually.
Given all the statistical information concerning the pressing need to address the issue of long-term care needs, it is absolutely essential to have a plan for yourself or a loved one. If you do not have a plan, then that’s your plan.
(We will continue this discussion of long-term care and provide more information and solutions in our next column).