Rising Long-Term Care Costs in America: How to Plan Now

Once you get past 40, it's hard to ignore the impact of aging on your life and those around you. Whether it be aging parents, other family members like aunts and uncles, grandparents, neighbors, or even coworkers, long-term care has become omnipresent in our lives.

Yet, many people are not planning for the rising cost of long-term care services. Some believe their health insurance or Medicare will cover these expenses. However, these programs only provide for short-term skilled care, leaving long-term care your responsibility. Others think Medicaid is a viable solution, which it is—but only for those with limited financial resources.

Then there's Long-Term Care Insurance. While the idea of adding another insurance policy may not be appealing, the reality is that 56% of people who reach age 65 will need some form of long-term care. For many, an LTC Insurance policy is an affordable and practical solution to address the rising costs of long-term care.

Avoiding the Thought of Long-Term Care

Most people don't like to think about long-term care, often due to fears of ending up in a nursing home. This sentiment is common: a 2023 West Health and Gallup poll found that 70% of respondents said they'd be uncomfortable being admitted to a nursing home, and 61% reported they'd feel uneasy about placing a family member in one.

Despite these concerns, nursing homes represent only part of the picture. The latest data reveals that approximately 30.9% of long-term care recipients reside in nursing homes, with many of these individuals qualifying for Medicaid due to limited financial resources.

The majority of long-term care services are provided in other settings, such as home health care, assisted living facilities, and memory care units.

Understanding the Issue

When considering long-term care, it's essential to think about both the financial costs and the future impact on your family. Planning now can prevent your adult children or other loved ones from facing significant caregiving burdens and ease the financial implications for you and your spouse.

Most long-term care is not provided in nursing homes, which is fortunate given that they are the most expensive type of care. The cost of long-term care services varies depending on:

• Location: The cost of care differs greatly depending on where you live.
• Care Setting: Services provided at home, in assisted living, or in memory care are typically less expensive than nursing home care.
• Type of Services Required: Costs can vary based on whether the care needed is skilled or semi-skilled.

Impact on Family

Unfortunately, many people fail to plan for long-term care, leaving their families to shoulder the physical, emotional, and financial burden. Even a significant amount of savings can be quickly depleted by long-term care expenses, and using personal funds often comes with tax implications that increase the overall cost of care.

Family caregivers, who are often untrained and unprepared, face additional challenges. They must juggle their caregiving responsibilities with their own careers, families, and personal lives, which can lead to stress, burnout, and financial strain.

Having a plan in place can alleviate these challenges. Long-Term Care Insurance provides guaranteed, tax-free funds to pay for care in any setting—whether at home, in an assisted living facility, or elsewhere. This ensures that your loved ones can remain family members rather than become caregivers while protecting your income, assets, and legacy.

Key Takeaways

• The cost of long-term care services in the U.S. has risen across all provider types. Median annual costs range from $59,985 for in-home care (based on a 44-hour week), $53,671 for the base cost of assisted living facilities (before surcharges), to $111,909 for a private room in a nursing home.
• Inflation and a shortage of skilled workers are the primary drivers of these cost increases, according to the LTC News survey of long-term care costs in the United States.
• Planning for long-term care expenses now can help you avoid financial and emotional strain later. Long-Term Care Insurance is a practical and affordable option for many and can often be paid for using pre-tax dollars from a Health Savings Account. Plus, some people may qualify for federal and state tax deductions by owning a qualified LTC Insurance policy.
• Health insurance and Medicare do not cover long-term care, except for short-term skilled care. Medicaid may be an option for those with limited financial resources, and local agencies and nonprofits may offer additional assistance.

Cost of Care Expected to Increase

The demand for extended care services continues to grow as the population ages. Simultaneously, labor costs are rising, and the supply of skilled workers is decreasing. These factors contribute to the ongoing increase in the cost of long-term care services.

The LTC News Cost of Care Calculator provides valuable insights into the current and projected future costs of long-term care services nationwide. This tool can help you understand what to expect in your area, enabling you to plan accordingly.

Planning Now

The best time to plan for long-term care is while you are still in relatively good health. Most people purchase an LTC policy between the ages of 47 and 67. Starting now allows you to take advantage of your better health and even obtain preferred rates, but it also allows you to lock in lower premiums.

Planning ahead for long-term care is not just about safeguarding your finances. It's about protecting your family from unnecessary burdens, ensuring you receive the quality care you deserve, and preserving your legacy for future generations. With the rising costs of care, the time to act is now.

Dealing with Loved Ones Who Need Care Now

Caring for a loved one who suddenly requires long-term care can feel overwhelming, especially when you need immediate solutions to balance their needs with your own responsibilities. Fortunately, resources and strategies are available to help you navigate this challenging time.

One invaluable tool is the LTC News Caregiver Directory, which provides access to over 80,000 listings of caregivers, home care agencies, and facilities across the United States. This free directory allows you to search for qualified professionals or suitable facilities in your area, ensuring your loved one receives the best care possible while giving you peace of mind.

For care providers, the LTC News Directory Business Portal offers the opportunity to claim a free listing or upgrade for enhanced visibility. 

For families without LTC Insurance or money to pay for expensive facility care, the financial burden of caregiving can be particularly daunting. In such cases, exploring alternative options is important to ease the strain on family caregivers. Local non-profits, government programs, and community organizations often provide respite care, meal delivery services, or transportation assistance.

Additionally, some states offer Medicaid waiver programs that can cover in-home care or assisted living services. These resources can help relieve family caregivers, who often face emotional and physical exhaustion, by providing professional support and ensuring your loved one's needs are met.

Another critical aspect of providing care is ensuring the home environment is safe and conducive to their changing needs. Start by assessing the space for potential hazards, such as loose rugs, poor lighting, or inaccessible areas, and consider modifications like grab bars, ramps, and medical alert systems.

A well-organized, clutter-free environment can reduce the risk of falls and make daily activities more manageable for your loved one. Working with occupational therapists or home modification specialists can further optimize the home for safety and ease of care.

Ultimately, addressing the immediate needs of a loved one requiring care involves a combination of finding professional help, supporting family caregivers, and creating a safe living environment.

By leveraging resources like the LTC News Caregiver Directory and seeking support from available programs, you can ensure your loved one receives compassionate, high-quality care while alleviating the burden on your family.

Don't Delay

Delaying the important decision about long-term care planning or getting care for a loved one can have serious consequences, including financial strain and limited care options.

When planning, incorporating LTC Insurance into your comprehensive retirement plan ensures you have the resources to access quality care without depleting your savings or burdening your family. Be sure to get accurate quotes from all the top-rated insurance companies that offer long-term care solutions.

If a loved one requires care, it's equally important not to delay getting the help they need. Waiting often leads to more significant challenges, whether it’s a decline in their health or increased stress for family caregivers.

If they have an LTC policy, activate their benefits as soon as they qualify. There’s no reason to "save" those benefits for later; the policy is there to support their needs now. Timely use of these benefits ensures your loved one receives proper care while easing the emotional and financial burden on everyone involved.

LTC NEWS has combined efforts with Amada Senior Care, a leading in-home healthcare agency with locations throughout the country, to help you process a claim from any LTC Insurance policy - Filing a Long-Term Care Insurance Claim.

Procrastination only makes situations more complicated—take action today for a better tomorrow.