Ask the Expert: What are the Costs of Aging in America?

Q. My 65th birthday is just around the corner. I retired from a job that I loved last summer and I think that I am ready for what lies ahead. The problem is, I am not sure if I can afford it — future long-term care costs in particular are making me very nervous, because I tried to get long-term care insurance but I was denied because of a pre-existing medical condition!  I have several friends who also tried to get long-term care insurance but it wound up being way too expensive for them to afford.  Are there options for people like us to consider in place of long-term care insurance?

A. Living longer does not come cheaply. During retirement our income typically drops dramatically, but our expenses do not. This is especially true when it comes to long-term care.

  • Many retirees drastically underestimate long-term care costs and therefore don’t incorporate it into their overall retirement plan. According to a recent article in CNN Money, the median cost of living in private nursing homes and assisted living facilities has ballooned by 24% and 23%, respectively, over the last five years. Below are some of the items you should take into consideration when estimating the cost of long-term care, and some figures that are based on current research:The Federal government reports that 70% of people who reach the age of 65 will require long term care services at some point in their lives. Of those, 20% will need care for between two and five years, while another 20% will need care longer than five years.
  • The median annual cost of private nursing home care in the United States is now $83,950. In Northern Virginia, nursing homes cost between $9,000-$12,000 a month or $108-144,000 a year (a few thousand less in Fredericksburg). An average stay in a nursing home will often impoverish a family.
  • Semi-private room costs in nursing homes have risen to an average of $75,405 per year in the U.S., and even a stay at an assisted living facility — where patients do not receive anywhere near the level of care that they would at a private nursing home — now tends to cost over $41,000 per year.
  • Less costly alternatives include hiring home health care aides and other live-in assistance. The median price for those services have only risen at about one percent per year over the last half decade to about $44,000 annually.
  • Medicare and other forms of health insurance don’t cover long-term care in a nursing home. Medicaid will cover this type of long-term care, but to qualify for Medicaid, you’ll need to work with an experienced Elder Law Firm, such as the Farr Law Firm, to protect your hard-earned assets.  This is because our American health care system essentially discriminates against people who get the “wrong type” of illness or injury – an illness such as dementia or an injury such as a stroke – which results in the need for care that doctors can’t help.
  • As demand for long-term care services is increasing, the cost of home health aides, adult day care, and nursing homes is also rising. These increasing expenses aren’t likely to slow as Americans live longer and have more health problems later in life, experts say.

For more details on the costs of healthcare, please see the 2013 Genworth Cost of Care Study. In addition, for details on the costs of housing, transportation, insurance etc., please see the Expenditure of the Aged Chartbook, released earlier this year.

These numbers aren’t meant to scare people but to educate people on the reality so they can take the necessary steps to plan for them while they still can.  To answer your question, there are options for paying for long-term care besides long-term care insurance.  The two primary methods to pay for long-term care (besides paying out of your own pocket and winding up broke) are Medicaid (available to anyone who can qualify) and Veterans Aid and Attendance (available to qualified wartime veterans).   But to get these benefits you need to first protect your assets so that your assets won’t count against you when trying to get these benefits.  The best way to protect your assets, while you’re still healthy, is through the Living Trust Plus™ Asset Protection Trust, which allows you to protect your assets from the expenses of probate, PLUS lawsuits, PLUS nursing home expenses.  Read more about the Living Trust Plus™ Asset Protection Trust at our firm’s website or at http://www.livingtrustplus.com, or order my best-selling book about this trust at Amazon.com.

When it comes to planning for long-term care, while many people acknowledge that they will need it, few have put a plan in place. If you have not planned for long term care in advance, it is wise to do so to ensure that you and your husband will always receive the care you need without worry or financial struggle.  Learn more at our Long-Term Care Asset Protection Law Firm of Evan H. Farr, P.C. website, or call us at our Virginia Elder Law Fairfax office at 703-691-1888 or at our Virginia Elder Law Fredericksburg office at 540-479-1435 to make an appointment for a no-cost consultation.

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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