November has been declared Long Term Care Awareness Month by the American Association of Long Term Care Insurance. On a related note, November is National Family Caregiver’s Month. But once care giving services are needed, it is probably too late to purchase long term care insurance. This insurance is one of the most important ways to plan for possible future care.

Traditional health insurance isn’t designed to cover long term care and many Americans may need long term care at some point in their lives. Generally, Medicare isn't designed to adequately cover long term care costs. Since many Americans do not yet own long term care insurance, the burden of care giving often falls upon unpaid family caregivers. Although all long term care needs, by definition, last more than 90 days, many people need help for much longer, sometimes for years. This can be a significant physical, financial and emotional burden for family caregivers.

In an effort to encourage Americans to prepare for their future long term care needs, Long Term Care Awareness Month reminds all of the importance of this planning. While most people don’t like to think of this aspect of retirement planning, it is just as important as drafting a will or saving for retirement.

Consider these facts:

Need

  • By 2026, the population of Americans ages 65 and older will double to 71.5 million.
  • Between 2007 and 2015, the number of Americans ages 85 and older is expected to increase by 40 percent.
  • Among people turning 65 today, 69 percent will need some form of long-term care, whether in the community or in a residential care facility.
  • By 2020, 12 million older Americans will need long-term health care.

Cost

  • The average daily cost for a private room in a nursing home is $213, or $77,745 annually.
  • The average daily cost for a semi-private room in a nursing home is $189, or $68,985 annually.
  • The average monthly cost of living in an assisted living facility is $2,969, or $37,628 annually.
  • The average monthly cost of living in a not-for-profit Continuing Care Retirement Community is $2,672, or $32,064 annually.
  • The Average monthly rate for assisted living facilities that charge additional fees for Alzheimer's and dementia care is $4,270, or $51,240 annually.
  • To move into a community, individuals must also pay an entry fee ranging from $60,000 to $120,000.
  • The average hourly rate for certified home health aide is $32.37.
  • The average hourly rate for uncertified home health aide is $19.00.
  • The national average daily rate for adult day centers is $61.
  • The national average hourly rate for homemakers/companions is $18.

Who Pays

  • Nearly 40 percent of long-term care spending is paid for by private funds.
  • Medicare, which covers rehabilitation services after an individual is discharged from a hospital, pays for 19 percent of all long-term care spending.
  • Medicaid, which covers health care costs for low-income individuals, pays for 49 percent of all long-term care spending.
  • Accounting for about 40 percent of total expenditures on nursing facilities, Medicaid's payments cover the care of more than half of all nursing home residents.

Long-term Care Insurance

  • The average annual long-term care premium for individuals under 65 is $1,337.
  • The average premium for individuals over 65 is $2,862.
  • The average long-term care insurance policy purchased by a 65-year-old and held until death pays out 82 cents for every dollar.
  • Since 1987, fewer than 10 million Americans have bought long-term care insurance, and only about 7 million of those policies remain in force today.
  • Almost 30 percent of Americans over 45 have purchased a long-term care insurance policy.
Posted 11:35 AM

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