Dear Angel,
I follow Mr. Farr’s newsletter and understand the need to plan in advance for long-term care, since it’s only getting more expensive. Others I know do not see this as a priority. Is the lack of preparation in advance for long-term care (something I hear that 70% of us will need one day) a common thing?
Thanks for your help!
Pryor Itty
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Dear Pryor,
Millions of seniors, as well as some younger people with disabilities, require assistance with activities of daily living that may be provided in residential facilities such as nursing homes or assisted living facilities, or in their homes or other settings by paid or unpaid caregivers.
You are correct that most adults do not feel prepared to handle the astronomical costs of long-term care, and most older adults have not taken financial or legal steps to plan for care needs that might arise in the future. A nursing home in the DC area runs from $14,000 – $17,000 a month and these costs are only increasing. Kudos to you for planning in advance!
In a recent survey, Kaiser Family Foundation (KFF) — not affiliated with Kaiser Permanente — explored if people think about long-term care, what programs cover long-term care, how individuals will pay for care if they need it, and whether those individuals have taken steps to prepare for any need.
The survey findings are as follows:
- Few adults have had important conversations about future care needs with family members. This includes asking who would be willing to help with activities of daily living such as eating, bathing, dressing, toileting, and moving from one place to another, as well as discussions about how the family will pay for necessary care.
- Most adults 50 and older reported anxiety about affording care and unexpected medical expenses.
- Among those ages 50-64, many of whom are on the cusp of retirement, 28% say they have set aside money that could be used to pay for future living assistance expenses. This percentage is much higher among adults ages 65 and older (48%), but still half of adults in this age group say they have not put any money aside for this purpose.
- The overwhelming majority of adults (90%) say that it would be impossible or very difficult to pay the estimated $100,000+ needed for one year at a nursing home or the estimated $60,000+ for one year of assistance from a paid home health aide (83%).
- There is also a fair amount of confusion about how long-term care is financed in the United States. Although Medicaid is the main source of coverage for these services, 23% of adults – rising to 45% of those ages 65 and older – assume that Medicare would pay the bill for their own or a loved one’s time in a nursing home if they had a long-term illness or disability. However, Medicare does not pay one penny for long-term care! Yet, four in ten adults overall incorrectly believe that Medicare (rather than Medicaid) is the primary source of insurance coverage for people who need nursing care or home care over a long period of time.
- Many find that long-term care and support services are difficult to find and afford.
- Among those who say they or a loved one has resided in a nursing home or other long-term care facility in the past two years, 62% say it was difficult to find a facility to meet their needs and a similar share say it was difficult to afford the cost of the facility. About half say the same about finding and affording support from paid nurses or aides.
- Among those who contributed financially to their own or another’s long-term care or served as a caregiver for a loved one, 56% say they cut back on spending on food, clothing, or other basic household items as a result (rising to 67% among those in lower-income households) and one-third (rising to 49% of those with lower incomes) say they had trouble paying rent or other utilities.
As you can see from these findings, you are wise to think about and plan in advance for long-term care. I recommend that, based on the findings above, others who have not done so should make an appointment with Mr. Farr to plan in advance!
Hope this is helpful!
Angel
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