Written by P. Mark Accettura

As you move forward, you should plan for the possibility that at some point you may not be able to live independently. Advances in medical science have greatly increased the likelihood that we will live beyond the point that we are able to care for ourselves.

You may not be able to rely on your children, whose own personal obligations may make them unable or unwilling to provide for your care. As the old saying goes, “One parent can take care of ten children, but ten children cannot care for one parent.” The statistics on aging and long term care are compelling.

One in five Americans older than 65, and nearly half of those older than 85, will need assistance with everyday activities. Fifty percent of women and 30% of men over age 65 will require long-term care during their life. Despite these statistics, nearly 60% of Americans have given “very little thought” or “no thought at all” as to whether and when they will need long term care.

The greatest concern for older Americans is that their entire wealth accumulation will be dissipated if they experience an extended stay in a skilled nursing care facility. According to a recent report, the average cost of a year in a nursing home is approximately $45,000 a year, roughly equating to $125 per day. Since 1990, the cost of long-term care has increased at an annual average rate of 3% above the overall rate of inflation. Further, according to the New England Journal of Medicine, more than 50% of those who require 24-hour care will need such care for more than 2 ½ years.

Long-term care for the elderly has evolved to include various forms of home care and long term nursing home care, all of which are very expensive. Long-term care (LTC) ranges from help with day-to-day activities in the home (such as bathing, dressing, preparing meals, etc.) to more sophisticated services such as skilled nursing care.

While typical health care services are cure oriented, long-term care involves treatment of chronic conditions and thus is said to be care oriented. Long term care can be provided in one’s own home, an adult day care setting, in an assisted living/residential care facility, or a skilled nursing care facility.

The high cost of skilled nursing care is of special concern to “community spouses,” that is, the non-institutionalized spouse of a skilled nursing care patient. Community spouses need assurance that their dependent spouse’s care won’t wipe them out financially.

Whether or not you are married, the balance of this chapter will help you establish a plan to pay for long-term care without leaving you or your heirs penniless.

The primary sources of funding for the payment of LTC are:

1. Medicare;
2. private pay (including long term care insurance);
3. Medicaid.