Do you know the true cost of long-term care?
Chances are, like most consumers, the financial impact of long-term care can come as a shock when the situation presents itself. And according to the National Clearinghouse for Long Term Care Information, there’s a 70 percent chance that you (or another family member) will be faced with that scenario sometime after age 65.
But according to the Genworth study, Beyond Dollars: The True Impact of Long Term Caring, almost half of care recipients had not considered the possibility of needing long-term care—an outcome that can be caused by a prolonged physical illness, disability or severe cognitive impairment.
When that occurs, the paid assistance options (and their national median costs according to the Genworth 2012 Cost of Care Survey) include:
- Licensed homemaker services ($18/hour)
- Licensed home health aide services ($19/hour)
- Adult day health care ($61/hour)
- Assisted living facility ($3,300/month)
- Nursing home ($200-$222/day)
And if you believe that the full cost will be covered by Medicare or Medicaid, understand that the former covers only short-term skilled nursing home care, while the latter only applies if you meet specific poverty guidelines.
Family members often step up to the plate, with 87% providing care for an immediate family member, while 37% of care recipients were moved into a family member’s home for a period of time, according to the Beyond Dollars study. But even family caregiving comes with a price—both dollar costs since, even with insurance, there are out-of-pocket expenses and also “hidden costs” in terms of time, energy, impact on other family relationships and professional obligations.
Direct and Indirect Costs of Caregiving
According to the study, the average amount care recipients spend out-of-pocket for their own care (not including the cost of facility care) can total $14,000, with family members contributing another $8,000.
But the financial impact doesn’t stop there. Many times, the caregiver’s work life suffers, with nearly one-fifth of those surveyed reporting a direct loss of career opportunities, while 44% had to cut back on their hours, which had a detrimental effect on their income.
But caregiving isn’t just a clear-cut dollars-and-cents calculation. The impact reverberates through all aspects of the caregiver’s life, particularly concerning other family relationships. With caregivers having less time and energy to devote to their spouses and children, those relationships can experience significant stress. With 42% of caregivers reporting that the family member needing care lived with them for three years or more (24% have been caregiving for over eight years), the long-term effect can’t be denied.
What can you do now to help lessen the impact on yourself and your family down the road? Start by educating yourself about the cost of long-term care services, coverage options for long-term care and long-term care insurance here. You can also click here for a free 8-page guide to long-term care insurance from the non-profit LIFE Foundation.
Then discuss your options with your family before the need arises. Having a plan in place reduces everyone’s stress, and allows all parties involved to develop strategies to cover different scenarios.