Rising Long-term Care Costs in U.S.

An April 2008 Study of long-term care (LTC) costs for the elderly in United States, published by Genworth Financial, highlights a growing concern for seniors and their family members. According to this study, the national average for the cost of nursing home care is approximately $76,460 per year, which is more than 150% of the average annual income of American households.

Numbers specific to Utah from this study include: Nursing Home - $57,332/yr. (private room) and $52,053/yr. (semi-private room); Assisted Living Facility - $29,193 (private, one bedroom); Adult Day Health Care Facility - $9,646 (8 hrs./day, 5 days/week); Home Health Aid - $61,662 (Medicare-certified & Licensed), $47,041 (licensed only); Homemaker Services - $45,028 (licensed only, based on 44 hrs./week). It is important to remember that these numbers do not include the costs of prescriptions, medical or dental care, or other typical costs of living.

Federal and State government, in an attempt to curb the massive hemorrhaging of money into long-term care for the elderly through the Medicare and Medicaid programs, have been tightening many of the laws that previously allowed seniors to qualify for these programs. As a result, many families will simply not have the means to pay for these services without careful planning.

The insurance industry has attempted to meet this growing need through LTC insurance policies. My own family's experience with LTC insurance was wonderful. My father's 12 year battle with dementia and the institutional care that it required resulted in enormous costs. Without the LTC policy that my father purchased years ago, the financial strain on our family would have been unimaginable. However, not all policies are created equal. You should consult with your financial advisor, insurance agent or Elder Law attorney to determine whether a long-term care insurance policy makes sense for you or your loved one.

Of course, there are other options for planning for your long-term care. I will discuss more of these options in future posts