There’s a good possibility that you or your spouse will eventually require some form of long-term care. According to the U.S. Department of Health and Human Services (HHS), about 40 percent of people aged 65 or older will enter a nursing home for some period of time during their lifetimes.
Long-term care includes a range of nursing, social and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability. It can be used by anyone at any age who suffers an accident or debilitating illness; it most frequently is used by older adults who need assistance with physical needs, such as bathing, dressing or eating.
It is wise to consider how you might pay for long-term care and whether insurance is a good idea for you. According to HHS figures, the average cost of care is $198/day for a semi-private room in a nursing home, $3,131/month for care in assisted living, and $21/hour for a home health aide.
With health care costs rising every year, these expenses can be expected to grow substantially over time. Furthermore, neither Medicare nor Medicare supplemental coverage (also known as Medigap insurance) typically cover long-term care. Medicaid will cover a large share of such services only if you meet stringent financial and functional criteria. What’s more, most employer-sponsored or private health insurance plans follow the same general rules as Medicare. Therefore, most people who need long-term care must pay for some or all of it on their own.
Like life insurance, long-term care policy premiums largely depend on your age and health. If you take out a policy when you are young, you can expect to pay comparatively low premiums during the life of the plan, while starting a new policy when you are older will entail significantly higher monthly premiums.