The Rising Cost of Long-Term Care: Can You Afford It Without Insurance?

As the cost of long-term care continues to increase, many individuals are left wondering if they can afford it without insurance coverage.

Long-term care is a reality that many individuals will face as they age. With about 70% of people needing some form of long-term care by the time they reach 65, it is crucial to consider the financial implications of such care. While some opt for long-term care insurance to cover the expenses, others rely on their own savings. However, the cost of long-term care is rapidly rising, leaving many to question if they can truly afford it without insurance. In this article, we will explore the expenses associated with long-term care, the limitations of Medicare and Medicaid, and the importance of planning for future care costs.

Can you afford long-term care without insurance?

Aging in place may not save you money in the long run.

One common misconception is that aging in place, or staying at home, will save individuals money when it comes to long-term care. However, the reality is that around-the-clock care at home can be more expensive than living in a nursing home or assisted living facility. Arvette M. Reid, Client Services Director of the Lifecare Affordability Plan, explains that people often underestimate the costs associated with 24/7 care at home. While aging in place may provide comfort and familiarity, it is essential to consider the financial implications. In contrast, a long-term care insurance policy can help cover the costs, even if one chooses to remain at home.

Medicare and Medicaid generally don’t cover long-term care expenses

Relying on Medicare or Medicaid for long-term care may not be a viable option.

Many individuals mistakenly believe that Medicare or Medicaid will cover their long-term care costs. However, these government programs typically do not cover such expenses. Arvette M. Reid emphasizes that long-term care expenses are typically out-of-pocket costs not covered by Medicare or Medicaid. It is crucial to create a different plan if you were relying on these programs to pay for your care. A long-term care insurance policy can provide a reasonable solution to ensure you have the means to cover your care expenses.

The cost of long-term care is rising quickly

Inflation and other factors contribute to the increasing cost of long-term care.

The cost of long-term care is not immune to inflation. Larry Hendrickson, founder and managing partner at G&H Financial Group, explains that healthcare inflation has been rapidly increasing, with service costs rising 10% to 20% each year. Factors such as healthcare professionals leaving the industry have resulted in higher costs across the board. For instance, the cost of in-home, non-skilled care has seen a significant increase from $18.00 to $38.00 per hour. The cost of care in independent living or skilled nursing facilities can range from $50,000 to well over $100,000 per year. These rising costs make it even more crucial to plan for long-term care expenses.

How much money does long-term care really cost?

The cost of long-term care varies depending on the type of care needed.

The cost of long-term care varies depending on the level of care required. Lori Gross, a financial and investment advisor at Outlook Financial Center, highlights three basic levels of facility care: at home, assisted living facility, and skilled nursing home. According to a 2021 Genworth cost of care survey, the average monthly cost for an in-home health aide is $5,148, while an assisted living facility charges around $4,500 per month. Skilled nursing homes are the most expensive option, with an average monthly cost of $7,908 for a semi-private room and $9,034 for a private room. These figures indicate that long-term care expenses can range from $54,000 to $108,408 per year on average.

Conclusion:

The rising cost of long-term care presents a significant financial challenge for individuals who may need such care in the future. Aging in place may not be a cost-saving solution, and relying on Medicare or Medicaid may not cover the expenses. With the cost of long-term care increasing rapidly, it is crucial to plan ahead and consider purchasing a long-term care insurance policy. By doing so, individuals can ensure they have the means to afford the care they need without depleting their savings or compromising their quality of life.


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