Long-term care is a frightening and mysterious subject for many people. It involves aging, the need for personal assistance, and money – all emotionally charged topics. Often, difficult long-term care experiences with family members make the topic even harder to talk about. This article, the first in a series, aims to uncover some of the mystery, and lay the groundwork for thoughtful discussion and decision-making. We’ll define long-term care, talk about who needs it and why, how to pay for it, and outline some usage and cost numbers. Future articles will cover each of these areas in more detail.
What is long-term care?
Though many people improperly refer to it as “long-term health care”, long term care is not medical care. It is custodial or personal care. Custodial care is assistance with the basic activities of daily living, or ADLs. The six globally defined ADLs are:
- Transferring (e.g., from a bed to a chair)
A person might also require this type of care if they suffer from a severe cognitive disorder, such as Alzheimer’s or other forms of dementia.
Long-term care can also include support or services that assist with everyday tasks, such as housework, managing money, helping administer medication, shopping for groceries, or meal preparation.
How likely is it that I will need long-term care and how much will I need?
It is impossible to predict the amount, type, and duration of care anyone will need. Age, lifelong health habits, family history, and even chance (such as a fall, serious accident, or unexpected illness) all influence the probability of requiring long term care. According to the U.S. Department of Health and Human Services:
- Although the need for long-term care can occur at any age, the older you are, the more likely you will need some.
- Americans turning 65 today have almost a 70% chance of needing long-term care services at some point in their remaining years. A serious accident or chronic illness that causes a disability increases the likelihood of needing it.
- Women outlive men on average, so they are more likely to need care later in life. They also need it longer (3.7 years for women and 2.2 years for men).
- Regardless of gender, people who live alone in old age are more likely to need long-term care.
- Although one-third of today’s 65-year-olds may never need care, 20% will need some type of care for longer than 5 years.
If I need long-term care, who will provide it?
There are four types of long-term care providers:
- Unpaid caregivers in the home, such as partners, family members, friends, or neighbors.
- Paid home health or home care aides who come to the home.
- Adult day services – Community-based centers that address the needs of functionally or cognitively impaired adults in a structured and protective setting, during any part of a day (but not on a 24-hour basis).
- Long-term care communities providing both housing and long-term care. These include Assisted Living or Skilled Nursing providers (nursing homes). Some Assisted Living communities specialize in memory support services for people with dementia. Nursing homes are most appropriate for people who need significant, around-the-clock custodial care. Some providers, called Continuing Care Retirement Communities, or CCRCs, provide the above services, as well as independent living units, on one campus. (I wrote extensively about CCRCs in 2018. You can find links to my articles here.)
Those who need long-term care often start out with unpaid care at home. Approximately 80 percent of care at home is provided by unpaid caregivers. According to a 2015 study by The American Association of Retired Persons (AARP) and the National Alliance on Caregiving, approximately 43.5 million people in the U.S. had been unpaid caregivers in the previous 12 months.
Many people can live at home for years with help from family and friends. After a while though, all this support can deplete the physical, mental, and financial strength of loved ones. About two-thirds of unpaid caregivers are women (often adult daughters), who may also be caring for children. Some caregivers must give up promising careers or reduce work hours to care for an elderly parent. For those older adults who are care givers to their partners at home (approximately 14% of all unpaid caregivers, according to U.S. Health and Human Services), their own health often deteriorates as a result. In short, providing long-term care is a lot of work and often very stressful and costly for the caregiver.
How much does this type of care cost?
If you cannot rely on friends or family for your care and you do not qualify for Medicaid or have long-term care insurance, you will need to pay for your own care. The total cost of long-term care will depend on the type of care you need, how long you need it, the setting and location in which you receive it, and the care provider you choose.
Genworth Financial, a leading provider of long-term care insurance, publishes a yearly Cost of Care survey based on actual claims data across the country. According to the 2019 survey, the cost of a Home Health Aide — someone who comes to your home and provides personal assistance — ranged from $15 to $35 per hour, depending on the region. At these rates, four hours a day every day could run $20,000 to $50,000 annually.
In 2019, the median yearly cost of assisted living ranged from $50,000 to $80,000 depending on region, while for nursing homes that median cost was between $80,000 and $160,000. Moreover, long-term care expenses have been increasing at an annual rate of 3 to 4%, which is faster than the current rate of inflation.
Long-term care is certainly expensive!
Many people can absorb some of the cost of care. However, years of care, especially institutional care, can be financially devastating to both the care recipient and family members.
When should I start thinking about long-term care?
The best answer to this question is “before you need it”. Too many people wait until they experience a serious health crisis such as a stroke or injury to start addressing this issue, at which point their choices may become limited and more expensive. They may no longer be eligible for that long-term care insurance policy they had put off buying. That Continuing Care Retirement Community they’ve been eyeing for years might no longer accept them because they are not able to live independently. The assisted living community in their town may have a long waiting list, so they might have to choose one with fewer amenities or farther away from friends and family.
It is best to tackle this issue head-on well before a health contingency arises and develop a plan for aging that maintains your independence and dignity throughout your retirement years.
Now that we’ve covered some of the basics, we’ll move on to a more detailed discussion of long-term care and long-term care insurance. Watch for the next article.