Long-Term Care on the Rise

What is long-term care?



Long-term care encompasses a range of services that support aging individuals and help them meet their personal care needs. Common types of long-term care include:

• Nursing Homes & Assisted Living Facilities – Facilities for adults who are unable to live fully independently, with varying levels of care available.
• Home Care/Personal Care or Home Health Care – Home or personal care includes assistance with personal hygiene, dressing, and feeding. Home health care includes skilled nursing care, speech, physical, or occupational therapy, and home health aide services.
• Adult Day Care – Non-residential facilities that support the health, social, and daily living of adults in a staffed, group setting.

How costly is it?

While these services are crucial, costs have been consistently on the rise.

Currently, the median cost for a private room in a nursing home is more than $100,000 a year, and the annual price of just a home health aide is expected to be $69,529 by 2025, with per-person home health care costs expected to rise 9% annually through 2030. For nursing homes, the price is expected to rise 4.5% annually, according to government forecasts.

One of the primary factors driving these cost increases is the balance of supply and demand. With the senior population growing in the U.S., coupled with longer life expectancies and the lingering impacts of the COVID-19 pandemic on labor markets, the demand for such services has significantly increased.

Won’t Medicare cover care like this?

It’s important to note that Medicare typically only covers shorter-term services. In order to manage rising costs while protecting assets, seniors and their families have several options:

• Opting for a hybrid life insurance policy or annuity that includes long-term care coverage.
• Adding Living Benefits to a life insurance policy, allowing policyholders to access the death benefit in case of long-term care needs or certain health conditions.
• Qualifying for Medicaid, depending on asset and income criteria.
• Leveraging long-term care insurance, which is coverage for costs associated with long-term care that is not covered by health insurance, Medicare, or Medicaid.
• Utilizing personal savings, pensions, and investments to fund long-term care expenses.
• Many families employ a combination of these strategies to finance their long-term care, but the best path forward ultimately depends on your situation and preferences. Rest assured, I am here to assist you in exploring the best way to fund long-term care.