Long-term care costs are rising and don’t show any signs of slowing down. Private nursing home care (the most expensive option) currently costs more than $97,000 annually. It may soon exceed $100,000 per year.
Unfortunately, many people do not plan for or understand these types of expenses until they are faced with them. People avoid thinking and talking about long-term care, which results in little planning or saving for the future. A 2016 survey by Associated Press-NORC Center for Public Affairs reveals that a third of Americans 40 and older have done no planning for their long-term care needs.
Long-term care costs are huge financial burdens on individuals and families. Private health insurance and Medicare offer only limited help. People who do not have private long term care coverage must pay for nursing home care out-of-pocket. Without proper planning, this can lead to a depletion of assets.
The cost of care, including adult day care and assisted living communities, has risen an average of 4.5% this year, according to a recent survey by Genworth Financial. This is the second highest increase since Genworth began these surveys in 2004. The cost of home health aide services rose the most, up 6% from last year. Coverage costs are rising as well and initial premiums for long-term care can cost well over $2,000 annually, depending on the customer’s age, according to the Bipartisan Policy Center.
The Genworth Financial survey concludes that these rising costs may be due in part to growing labor expenses and sicker patients. Care providers had to raise pay to comply with state requirements for minimum wages. Also, many have started providing health insurance to their employees to comply with the Affordable Care Act. Genworth researchers say costs are rising and will continue rising because patients today have more complex medical needs yet live longer than they did ten years ago.
Although long-term care costs are rising, much of the financial burden can be alleviated by planning and thinking ahead. Careful planning can protect much of your assets. Call our office to discuss asset protection and Medicaid planning with one of our experienced attorneys.