Will You Need Long-Term Care?

A survey by Age Wave and Edward Jones found that 72% of Americans fear becoming a burden to their family. [i] That's why planning ahead is critical. But will you actually end up needing long-term care?

Research estimates that about 70% of Americans will require some long-term care. [ii] However, with Alzheimer's and dementia rates on the rise, the odds of needing extended care are likely increasing.

What Will Your Care Cost?

Advanced planning is critical with these rapidly escalating costs. Prefer to age in place? Non-medical in-home care rates have jumped from $18 per hour to as much as $38 depending upon region.[iii] That's just for basic care, not for medical needs. In March 2024, the median cost of a skilled nursing facility was $10,025 per month for a private room. [iv]

Won’t Medicare Pay for That?

People sometimes think that Medicare covers or helps with these costs. Unfortunately, that's not true. Medicare can cover short-term nursing home stays designed for rehabilitation after an illness or accident, but these are limited to 60 or 100 days.

Another program, Medicaid, does help with long-term care costs, but this is essentially welfare. If you run out of assets, these state-administered programs can step in and pay for assisted living or nursing home care. But here's the problem: not all Medicaid-approved facilities accept new Medicaid patients, and higher-quality facilities are increasingly avoiding it. That means you may have far fewer choices, and you may put yourself at risk of getting inferior care. Plus, these programs kick in only after your resources are spent.

Clearly, this is not ideal unless it is truly your last resort.

What about Long-Term Care Insurance?

Long-term care insurance was developed specifically to help protect against this unpredictable expense. However, with the spiking costs of care, fewer insurers are offering it. When they do, they don’t offer fixed rates, so adjustments happen frequently. Unfortunately, increases have shocked many policyholders, with premiums doubling or tripling in cost in one year. [v] These spiraling increases are making many of these policies no longer economically viable.