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Is Long-Term Care Unavoidable?


Americans seem to believe they’ll remain forever young and healthy. Fewer than one in three think it’s “somewhat likely”  they’ll need long-term care and just 7% think it’s “extremely likely” they will, according to the 2011 Financial Reality Check Study by Genworth Financial.  Instead, many responded “I’m not worried about it,” “my family and/or church will take care of me,” or ““I am still young and healthy.”

The reality, however, is much different.  Consider these findings from Medicare.gov:

*   This year, about 9 million men and women over the age of 65 will require long-term care.

*   By 2020, 12 million older Americans will need long-term care.

*   People who reach age 65 have about a 40% chance of entering a nursing home, according to a study by the U.S. Department of Health and Human Services.

In other words, most seniors may need some sort of long-term care in the future — and it’s going to be pricey. The average annual cost of a nursing home is more than $77,000 per year, according to the Metlife Mature Market Institute — and it can cost a lot more depending on the facility and where in the country you live. Even for those who seniors who only need a home health aide, the extra costs are between $20,000 and $40,000 per year, according to Andy Cohen, the CEO of Caring.com.

It’s these costs that make long-term care insurance a viable option for some. To that end, SmartMoney.com created a list of resources to help you figure out your long-term care needs and how to buy a policy.  Here are three resources that can help:

*   SmartMoney.com offers two calculators: The first lets you decide whether you need long-term care insurance and the second lets you evaluate specific policies.

*   Medicare.gov offers a long-term care planning tool that shows you what options are available in your area and lets you compare them.

*   AARP and Genworth offer a free state-by-state guide to long-term care insurance.


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    • Understanding the costs of senior care are the first step – research the nursing home daily costs before you need them: http://www.caregiverlist.com

    • Long term care insurance premiums can vary significantly from one insurer to another. We conduct an annual price comparison and the average cost for a 55 year old couple is $2,350 (combined) but the range is between $2,085 and $3,970 a year. If you don’t have the time or know how to compare policies, work with a professional who does. Our members offer that service free of charge and you can access at http://www.aaltci.org/long-term-care-insurance/free-quote/

      Jesse Slome
      Executive Director
      American Association for Long-Term Care Insurance

    • Some rather superficial info so may I suggest those interested read two online guides (free from the American Association for Long-Term Care Insurance. Access them at http://www.aaltci.org/long-term-care-insurance-costs/ and no sign-in info is required. They will be enormously valuable.

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.