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Understanding Long-Term Care Options

Understanding Long-Term Care Options

February 17, 2022

No one likes to think about the day that their aging parents or elderly loved ones will require acute or long-term care (LTC). And yet, 69% of aging adults will need some form of ongoing care in the later years of their lives. Planning for that time means understanding the types of care available, as well as budgeting for the expense. In 2020, the annual average cost for long-term care in the United States ranged from $19,240 to more than $100,000, depending on the type of service and facility.

Fortunately, there are a variety of options, depending upon where you live, your budget and the kind of care your loved one may need. Even if your parents or elderly family members are in good health today, the best time to research and consider LTC providers is long before your loved one needs these services. Although the choices may vary in your community, here are LTC options and potential ways to pay for them.

In-home care

  • What’s provided: Depending upon your loved one’s needs and medical conditions, there are a variety of home care options. For those who need help with activites of daily living (ADL), personal or in-home aides can help with basic tasks, such as bathing, dressing and other personal needs, as well as housekeeping, cooking meals and shopping. These aides are not medical professionals. They may remind your loved about taking their medicaitons, but are not qualified to administer them.

    Home health care is care provided by licensed professionals, such as a registered or licensed practical nurse, or occupational or physical therapist. This type of care is prescribed by a doctor and is typically used after an injury or hospitalization. These medical professionals may administer medications or injections, provide wound care, monitor vital signs and perform occupational or physical therapy. Although they will help with ADL, home health care professionals do not run errands, prepare meals, or perform housekeeping chores.
  • What it costs: $24 per hour, on average, for home care; $4,500 per month is the average for full-time home health care
  • How to pay for it: Depending upon the terms of the policy, long-term care (LTC) insurance policies and some Medicare Part C (Medicare Advantage) plans may cover the cost of in-home care. Medical insurance, including Medicare, may pay for home health care services if prescribed by a doctor.

Adult day care programs

  • What’s provided: For adults who don't need round-the-clock care, day programs offer social interaction, meals and activities, often including exercise, games, field trips, art and music. Some programs provide transportation to and from the care center as well as medical services, such as administering medications.
  • What it costs: $2,220 per month, on average
  • How to pay for it: Depending upon the terms of the policy, some Medicare Part C plans and LTC insurance policies may cover the cost. For those with low incomes, few assets and can demonstrate the need for care, many states offer Home and Community Based Services (HCBS) Medicaid Waivers to help offset the cost, although programs that accept the waivers may have limited availability.

Comprehensive at-home care programs

  • What’s provided: A Program of All-Inclusive Care for the Elderly (PACE) provides comprehensive medical care and support services, funded by Medicare and Medicaid, for older people living at home. Availability of PACE services varies by state.
  • What it costs: Paid for through state-administered programs
  • How to pay for it: PACE providers receive monthly Medicare and Medicaid capitation payments for each enrollee. Medicare enrollees who are not eligible for Medicaid pay monthly premiums equal to the Medicaid capitation amount, but no deductibles, coinsurance, or any other type of Medicare or Medicaid cost sharing.

Assisted living communities

  • What’s provided: These retirement communities are ideal for those who are active and in relatively good health but need a little extra help with tasks like medication reminders, bathing, dressing, meals, transportation, housekeeping, laundry and social activities. Services vary, as do prices.
  • What it costs: $4,300 per month, on average, for a private room
  • How to pay for it: Assisted living may be subsidized by Medicaid, depending upon your state’s program and your loved one’s assets and income. LTC insurance may cover at least some of the cost of care, but policies vary. Standard Medicare does not pay for assisted living, but will cover medical expenses while your loved one lives there; however, some Medicare Part C will cover in-home personal care assistance.

Nursing home

  • What’s provided: Nursing homes offer 24-hour nursing care for those recovering from illness or injury and serve as long-term residences for people who are unable to care for themselves. Nursing homes also offer end-of-life care. Services typically include help with activities of daily living (ADL) — which typically includes personal hygiene or grooming, dressing, eating, toileting and transferring or ambulating, as well as rehabilitative therapy, administering medications and wound care.
  • What it costs: $7,750 per month, on average, for a semi-private room; $8,820 per month, on average, for a private room
  • How to pay for it: Medicare will pay for 100% of the cost of care up to 20 days at a skilled nursing facility and approximately 80% of the cost up to 80 more days—but only for care during recovery following an inpatient hospital stay. Nursing home stays may be subsidized by Medicaid, depending upon your state’s program and your loved one’s assets and income. LTC insurance may cover at least some of the cost of care, but policies vary.

Continuing care retirement communities

  • What’s provided: For older adults who want continuity of location and care that will adapt with their changing health needs, continuing care retirement communities (CCRC) may be a good option. These facilities provide a village approach to living that typically includes independent living, assisted living and skilled nursing facilities all on one campus so that a person can remain in the same community as their need for services and care grows.
  • What is costs: Many CCRCs require an initial buy-in payment. The average initial payment is $329,000, but it can top $1 million. Once residents move in, they pay monthly fee, typically $2,000 to $4,000, for maintenance or service. This monthly fee varies by facility and the level of care the resident requires, but could include skilled nursing services, home repairs and maintainence, meals, utilities including cable TV, ambulance membership, real estate taxes and budiling insurance. It is important to read the fine print in the resident’s contract to know what is exactly covered and what will incur additional costs. Other continuing care communities operate on a rental model ($3,000 to $6,000 a month, on average) with no up-front fee and similarly vary in scope of what is included in the monthly cost, based on the facilities and level of care required.
  • How to pay for it: CCRCs may provide contract options for in-home services, meal plans, activities and skilled nursing care. You may chose to lock-in a monthly fee that covers the costs no matter the level of care your loved one requires or opt for a fee-for-service plan where costs fluctuate with your loved one’s needs. LTC insurance, Medicare and Medicaid would not help pay for the initial buy-in; however, insurance benefits could help off-set the added cost of services as your loved one requires more care and moves into the community’s assisted or nursing care facilities.