Many people don’t think about—or prepare for—long-term care. Unless they’ve had a friend or family member receive long-term care, they may not realize how essential it is—or how expensive it can be. October is Long-Term Care Planning Month, which was created to help raise awareness among individuals and families about the importance of being prepared for life-changing situations.
It’s not clear when October was named Long-Term Care Planning Month, but long-term care insurance plans have been around since the 1970s. These plans vary, but are designed to cover costs that aren’t paid by Medicare or conventional health insurance, such as inhome care, nursing homes, or assisted-living facilities
Doesn’t Medicare cover long-term care?
A lot of people assume Medicare or their private health insurance will cover long-term care costs—and this misperception is why Long-Term Care Planning Month is so important. Medicare pays for long-term care only if you require skilled services or rehabilitative care—and only for a limited time (a maximum of 100 days). It does not pay for non-skilled assistance for Activities of Daily Living (ADL), which makes up the majority of long-term care services, according to LongTermCare.gov. Private health insurance typically covers the same limited services that Medicare covers.
What long-term care means—and how much it costs
Long-term care generally refers to non-medical and personal-care services for elderly or disabled individuals who have trouble doing them by themselves—such as dressing, bathing, eating, using the bathroom, and other physical activities. Options for long-term care include in-home care, adult day care, assisted living facilities, and nursing homes.
Based on Genworth Financial’s 2021 Cost of Care Survey, here’s the breakdown for median costs for long-term care services and support:
- 4,957 a month for support with household services.
This includes responsibilities such as cleaning, cooking, and running errands—and not any handson care of individuals.
- $5,148 a month for a home health aide.
This includes hands-on personal care, but not medical care.
- $1,690 a month for adult day care.
This includes social and support services in a protective, community-based setting. Typically, it includes structured activities, socialization, and supervision— and some programs may also provide transportation, medical management, meals, and personal care.
- $4,500 a month to stay in an assisted living facility.
Assisted living facilities don’t provide the same level of care as a nursing home, but they include residential arrangements with personal care and health services.
- $9,034 a month for a private room in a nursing home—or $7,908 a month for a semi-private room in a nursing home.
Nursing homes offer on-site nursing care 24 hours a day, and also provide residents personal-care assistance, room and board, medication, supervision, therapies, and rehabilitation.
These are median prices for the nation. They vary by state, and can have huge differences. For example, the median price of a private room in a nursing home in Alabama is $7,026, according to the 2021 Genworth survey, and $13,535 in Massachusetts. To see locations and costs, check out Genworth Financial’s comparison tool.
How to recognize Long-Term Care Planning Month
Not many people have long-term care plans, but October is a great time to learn more about them and have conversations with family members about the importance of making a plan. The younger you are when you start, the more progress you can make with a designated savings plan, long-term care insurance—or whatever choice you make to prepare for potential long-term care costs. Talk with family members about whether aging-in-place is a good option, or if it makes more sense to move to a retirement community or something else.
When you get together with family members to discuss how you want to proceed—and how you can help one another—it may be helpful to consider these 2020 statistics from the Administration for Community Living:
- Someone turning 65 today has nearly a 70% chance of needing some type of longterm care services and supports in their remaining years.
- Women need care longer (3.7 years) than men (2.2 years).
- One-third of today’s 65-year-olds may never need long-term care support, but 20% will need it for longer than five years.
As you learn about the different options and potential challenges you and family members may face, you may find it helpful to talk to an experienced financial professional and/or an elder law attorney. Their expertise and guidance should give you peace of mind about your prospects for long-term care.
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal.
This material was prepared by LPL Financial.
Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.