Long term care costs continue to rise: Are you prepared?
As we get older, long term care can become top of mind. The possibility that you or a family member may need a greater level of assistance with your activities of daily living – such as bathing, dressing and showering – or even skilled medical care, can cause a significant amount of worry. Especially when determining how to pay for it:
“I haven’t done any planning for long term care. Should I be concerned?”
“What if I end up needing more care than I can afford?”
“Will we lose our house and everything else we’ve worked for to pay for my care – or my spouse’s?”
Unfortunately, the impact of COVID-19 has led to additional challenges in long term care cost and delivery.
Even before the pandemic, the cost of long term care kept increasing, in part due to the aging of the Baby Boomer generation and other trends, such as staffing shortages.
Then the virus arrived, and safety became an issue. Nursing homes and other long term care facilities were hit particularly hard with COVID-19, and staffing shortages got worse – as some workers were affected by the virus themselves, while others chose to seek alternative forms of employment in environments where their exposure was limited. Those who did stay needed to undergo COVID-19 training and follow new regulations that required additional resources, such as increasing the use of personal protective equipment.
All of this helped in turn to increase costs for the long term care industry as a whole.
Types of long term care and current median cost in Michigan*
When determining your own future long term care needs, it helps to have a good understanding of what types of care are available and the potential cost. There are several main types:
Home-based care: An increasing number of people are choosing to age in place at home. Depending on the specific needs, this type of long term care may involve help with activities of daily living or paraprofessional services such as having a home health aide do regular checks of blood pressure or other vital signs. ($5,529/month*)
Adult day health care: This type of community-based care differs from senior centers, which are typically focused on healthy older adults. Adult day care is for adults who have physical or other limitations, and it typically is offered during normal working hours. Adult day health care also provides recreation and social benefits as well as supervision, meals and even some level of medical services. ($1,733/month*)
Assisted living: In this type of facility-based care, adults receive support with activities of daily living – and also some of the same benefits of adult day health care, such as social activities, in a residential setting. While these facilities offer basic health care, such as helping with medication management, they do not provide full-time, skilled nursing care. ($4,250/month*)
Nursing home: This level of facility-based care is reserved for people who need constant supervision and full-time, skilled nursing care. (Semi-Private Room: $9,095/month, Private Room: $9,855/month*)
*Source: Genworth Cost of Care Survey
How can you pay for long term care?
Long term care insurance: This can be great – if you buy in early when you’re young and healthy. If you’re already old enough that the premiums are too expensive, you’ll need to look at other options.
Hybrid life insurance: Some people also balk at the idea of paying for long term care insurance they may never need. Hybrid life insurance offers an alternative option that combines long term care insurance and life insurance into one policy. If you end up needing long term care, the policy covers these costs. If not, the policy pays out to your heirs after you pass. However, this type of policy also can be expensive, and it typically requires a larger upfront premium payment.
Medicare: Unfortunately, other than rehabilitation and some specific, medical-related home health care costs, Medicare doesn’t cover most long term care services. For example, it may cover the medical treatment for a condition that prompts the need for long term care (such as a stroke), but the costs for having someone help you with activities of daily living or other personal care will need to be paid for separately.
Medicaid: This can be an option for some, but there are several Michigan eligibility requirements. An elder law attorney may help you qualify for Medicaid for long term care.
Out-of-pocket: This can include hard costs that you or your family pay, and also associated costs such as lost income from a family member who stays home to help care for a loved one.
The importance of a good elder care plan
Investigating public and private options to pay for potential long term care needs can get complex, quickly. And this is just one piece of your broader elder care plan, which takes into account additional needs you or a family member may have in the future. It includes other estate planning documents, such as a power of attorney, trusts or advance directives, which can also help to provide more control and peace of mind.
When navigating this process, it helps to have an experienced elder law attorney who can help you determine all of your potential elder care needs – and how best to pay for them.
Call (810) 207-6670 or complete our online form to request a free phone consultation.
Buzz Suuppi
Buzz started The Plan Firm for his family, which is everything to him. Every member of his team is committed to providing effective estate planning and related solutions for families in St. Clair County, Michigan.