Long Term Care Options for Seniors
What is Long-Term Care?
Long-term care includes a wide range of medical and support services provided over an extended period of time. Long-term care is not limited to the elderly; in fact, 43% of individuals requiring long-term care are younger than the age of 65. The vast majority of long-term care recipients are older, however, with a projected seven out of ten people over the age of 65 requiring some form of long-term care services in their lifetime. By the time an individual reaches the age of 75, there's a 50% chance they'll need long-term care.
Long-term care may be temporary or permanent. It all depends upon the underlying reason for the care.
Reasons for temporary long-term care (weeks or months) can include:
- Rehabilitation after a hospital stay
- Rehabilitation after a surgical procedure
- Recovery from an injury or illness
- End of life medical services
Reason for permanent (on-going) long-term care (months and years) can include:
- Permanent disabilities
- Chronic severe pain
- Chronic medical conditions
- Need for supervision
- Need for assistance with activities of daily living
- Cognitive impairment such as that caused by brain injury, Alzheimer's or dementia
The need for long-term care can be instantaneous, such as after a car accident, a stroke or heart attack. Generally, however, it develops gradually, as individuals age and become frailer or as an illness or disability worsens.
Although it is difficult to predict who will need long-term care and for how long the care will be required, several factors increase the risk of the needing long-term care:
- As individuals age, they become frailer.
- Women live longer and often require long-term care for a period extending twice as long as that of men.
- Marital status affects the need for care. Single individuals are more likely to need a paid care provider.
- Lifestyle and habits, including poor diet and lack of exercise, increase an individual's risk.
- Health and family history also come into play.
Most long-term care is provided by family members, friends and volunteers, all generally unpaid. In fact, it is estimated that 80-90% of all long-term care provided in the home is done so without compensation.
Categories and Levels of Long-Term Care
Long-term care services fall into two categories – personal care and skilled care.
Most long-term care falls into the category of personal or custodial care, rather than medical or skilled care. Personal care provides assistance with what is generally referred to as activities of daily living and/or provides for the supervision of an individual who is cognitively impaired.
Activities of Daily Living (ADLs) include the normal activities necessary to live at home. These personal care activities generally fall into four category types:
- Meal Preparation includes the planning and preparation of meals
- Household Chores includes routine tasks necessary for the upkeep of a home such as cleaning, laundry and yard maintenance
- Personal Hygiene includes bathing, grooming, dressing and toileting
- Errands and Transportation includes driving and shopping assistance
It's easy to take being able to perform activities of daily living (ADLs) for granted until you or family member experiences a chronic or degenerative condition and can no longer accomplish these tasks alone.
The second category of care is skilled care, which includes nursing, physical therapy, occupational therapy and medication management. These services are provided by a licensed professional.
Nursing care monitors health and vital signs. Physical therapy provides therapy sessions generally centered around the need to increase mobility and strength. Occupational therapy‘s primary focus is to improve the skills necessary to perform ADLs. Medication management monitors prescription medications and its daily dosing.
Long-term care falls into four different levels or frequency of care:
- Occasional assistance occurs a few times a month
- Minimal assistance may only be needed two to three times per week
- Significant assistance may be required as often as five times per week
- Maximum assistance might be needed every single day
Long-Term Care Living Options
Different types of long-term care are available within community-based care organizations and care communities.
Long-term care in the home is often provided by a family member, but care providers may be enlisted to provide housekeeping, personal care, home health aide and skilled nursing services. Rehabilitative services may be performed in the home or at a community-based service location depending upon circumstances. In-home care may not be feasible if care needs are extensive or medically intensive.
Long-term care in an assisted living community provides assistance with ADLs, basic healthcare, housekeeping, meals and medication management in a home-like setting. Assisted living communities promote self-sufficiency and strive to offer residents a high level of independence.
Assisted living is the intermediate step between independent living and skilled nursing.
Adult Day Health Care
Adult day health care provides a break to caregivers during the day. Health services, therapeutic services, social activities and meals are provided at a community- or facility-based location during the day as a part- or full-time service during the day for adults who need assistance or supervision, with the care recipient returning to their home in the evening. This type of service allows the primary caregiver to continue working, to run errands and take care of other business or to take a break from the demanding activity of caregiving.
Although a community may have both assisted living and memory care, the two are not synonymous. Memory care communities provide the vigilant care required for the care recipient dealing with Alzheimer's and dementia. This care includes a structured environment with set schedules and routines, plus round-the-clock supervised care in a secure, locked-down facility.
In a skilled nursing center, round-the-clock skilled nursing care is provided by licensed and trained nursing professionals. Residents generally have high care needs and complex medical conditions. Licensed nurses are onsite 24/7 and a doctor is on call at all times. Ambulances remain available to transport patients to hospitals in the need of an emergency.
Skilled nursing care centers offer services ranging from short-term care for a rehabilitative stay to long-term extended stays.
Rehabilitative services, treatments assisting patients in regaining recently lost abilities, are offered onsite and help individuals recovering from disease, illness, injury or surgery.
Finding a Long-Term Care Option
Our Senior Living Directory offers details on more than 75,000 senior care options, including facilities in your area. Use our search function to find the option that best meets your needs and criteria.
Costs of Long-Term Care
Due to its nature, often requiring 24-hour care or supervision, long-term care can be expensive. It may be provided by a family member or friend, a paid caregiver, a staff member within a care community or a combination of these. It can be provided in a broad range of locations, as well, ranging anywhere from an individual's home to a skilled nursing facility.
As the last of the boomers move into retirement age, thus increasing their need for long-term care, costs are expected to continue to rise. Several factors impact the cost of this care including location and type of care needed.
Location of care has an obvious impact on cost. Possible care locations include:
- The recipient's home with personal care and skilled care services brought in
- Community organizations, such as businesses providing rehabilitative services. This would also include an adult day health care program where care is provided for a portion of the day enabling the primary caregiver to continue working or to take a break from their caregiving duties during the day.
- A care community, such as assisted living or skilled nursing facility
The average cost of care in a care community varies from city to city and state to state. Although the costs to live in a community may seem high, when compared with all the costs it takes to remain in the home it often comes out less expensive to move into a community, especially if a paid caregiver is brought into the home. Online calculators are available to help make the cost of living comparison using your specific costs and needs. Genworth's calculator can also be used to help determine the costs of long-term care.
Type of Care
According to the 2017 Genworth Cost of Care Survey, the median cost of care nationally is:
- $3,994 for Homemaker Services
- $4,099 for Home Health Aide Services
- $1,517 for Adult Day Health Care
- $3,750 to live in an Assisted Living Community
- $7,148 for a Semi-Private Room in Skilled Nursing Care
- $8,121 for a Private Room Skilled Nursing Care
Memory care is more expensive, but it's more comprehensive as well, especially since 24-hour supervised care is required. The average cost of memory care in 2013 was $5000 per month with some communities topping out over $7000 per month.
How to Pay for Long-Term Care
The realities are harsh. Consider that the average length of a long-term care stay is 2-1/2 years. Using the above figures, a stay could run $97,452 per year!
Most long-term care isn't medical in nature, but rather personal care – assistance with ADLs. Medicare doesn't cover personal care if that is the only care provided. It does, however, pay for personal care if it's provided in a skilled care setting under a skilled care plan. This would include:
- Care in the home provided by an aide or Certified Nursing Assistant (CNA)
- Personal care provided in a skilled nursing center
- Personal care provided in a hospice care facility
Since Medicare funding is very limited, if the services can be approved at all, it may not be a viable option. Fortunately, you have quite a few options available to you:
- Self-pay often requires a substantial amount of savings be available for use.
- Long-term care insurance requires prior planning, and the longer you wait the more cost prohibitive it becomes. Just like any insurance policy you get, you pay for it hoping to never use it. More on this option in the next section.
- Qualify for Medicaid by spending down. Many people of modest means can exhaust their assets quickly and qualify for Medicaid coverage. Some states allow Medicaid to also cover some forms of home care or assisted living.
- Unlike home equity loans, Reverse Mortgages don't pose the risk of losing the home if payments can no longer be made. With a reverse mortgage, a homeowner is allowed to draw on the home's equity, with payment being deferred until they move out or pass away. Being a “nonrecourse” loan, even if the home eventually sells at a lower price, the seller is not responsible for the difference. How much you qualify for depends on the value of your home and your age.
- Some Life Insurance policies, those that also cover long-term care services, permit a certain percentage of the life insurance policy's face value to be used for specified care locations.
- Accelerated Death Benefits may also be covered by life insurance policies.
- Long-term care annuity contracts are another option to consider.
- In a Continuing Care Retirement Community (CCRC) Buy-In, you move into their retirement community prior to needing care, generally as an independent living resident. CCRCs generally require a substantial deposit – the “buy-in” – which is usually partially refundable as part of the care recipient's estate upon death. As your care needs increase, you move within the community. Premiums do not increase to cover this care, but they are initially higher than you would normally pay for less care. Some limits do apply and vary from community to community.
- A Life Settlement, which is the sale of a life insurance policy to a third party, can also be used to pay for the costs of long-term care. The party purchasing your life insurance policy will pay a value that exceeds the policy's cash surrender value, but less than its face value or death benefit.
Some of these options can be initiated at a younger age, but many have older age requirements. Some require you to be healthy while others can only be used when sickness has already overtaken you.
Long-Term Care Insurance
With the costs of long-term care, and their projected increases, and due to that fact that many health insurance policies and disability insurances don't cover long-term care, long-term care insurance may be the best way to ensure your long-term care needs are met and to protect your assets.
Long-term care insurance policies vary, but they typically pay a specific daily amount for skilled nursing care for a stipulated number of years or until the death of the policyholder. Long-term care insurance usually covers care in other locations as well, such as an assisted living facility or in the care recipient's home.
Experts have mixed opinions on the benefits of owning long-term care insurance for the following reasons:
- The policies are complex.
- The language used in the policy often is confusing.
- Determining the best age to purchase can be tricky. See section below for more info.
- Policies may have shorter stipulated years of coverage. Policies may stipulate three years of coverage, and with the average long-term stay being 2-1/2 years, you may be covered. But many find themselves needing long-term care for periods extending beyond this.
- Policies may have health requirements.
- Huge and unexpected premium increases may occur.
As you can see, there is much to consider when weighing the benefits of purchasing a long-term care insurance policy.
Best Age to Purchase
Determining the best age to purchase long-term care insurance can be tricky. With so many variables to take into consideration, each person's best age to purchase is different. And, as in all insurance policies, you purchase the policy hoping you never have to use it.
Purchasing at a younger age can be advisable. Premiums are less expensive, but you must be prepared to make payments for decades before you might need the coverage.
For some, it's wiser to wait to purchase coverage closer to the time you'll need it. And, if health and longevity run in your family, an even older age than most may be your best time to purchase. For example, a policy that pays out a specified amount of $150 per day for three years may cost $65 per month for a 55-year-old individual, or $115 per month for a 65-year-old. If your family has a history of dealing with cancer, buying at an earlier age may be advisable. But, if family members tend to live to be 85 and 95-years-old, buying at an older age may be the smartest choice. Trying to determine the best time to buy can be challenging.
Many other factors can substantially impact the cost of premiums including elimination periods, waiting periods and simple or compound inflation factors.
Medicaid and Long-Term Care Insurance Partnership Program
Medicaid also covers most long-term care costs, but requires the dreaded spend down, liquidating all assets. It's possible to protect your assets from spend down by setting up an irrevocable asset protection trust, but this must be done prior to the need for long-term care. It also has limitations and drawbacks which should be discussed with an elder law attorney who will help you draw up the trust.
To reduce some of the expenditures of the Medicaid program, the Long-Term Care Partnership Program was established. It is a public-private partnership between states and private insurance companies which can delay or eliminate the need for an individual to rely on Medicaid to cover long-term care services if they are covered by long-term care insurance.
Although most states have a Partnership Program, a few do not. If this is an option you want to pursue, contact a long-term care insurance policy provider to determine whether your state takes part in a Partnership program
The Partnership Program allows individuals to shelter a specified amount of assets while still qualifying for Medicaid. State standards for these policies vary. Additionally, the way each state's Partnership Program meshes with Medicaid differs and can be complicated. If you are considering purchasing such a policy, it would be wise to talk to an elder law attorney or a State Health Insurance Assistance Program counselor.
Tips for Buying Long-Term Care Insurance
It's best to do your homework before choosing and purchasing a long-term care insurance policy. Consider the following:
- Determine your needs. Call a few communities in your area and ask about their costs. Our directory makes finding communities easy.
- Only purchase a policy that covers care in a range of settings. Although you may prefer to remain in your home, certain health challenges, such as those requiring 24-hour skilled nursing care, may require care in other settings. Some policies even cover adult day health care services.
- Because costs are ever-increasing, purchase a policy that provides not less than 5% compound inflation protection. This will significantly affect the premium, but it's wise to protect yourself since skilled nursing facility costs are increasing at rates at or above this rate.
- If financially feasible, consider delaying the elimination period – the period of time following a qualifying event before coverage kicks in. This may significantly reduce your premium costs.
- Policies vary greatly concerning the coverage of assisted living. Review policy coverage to determine whether there are additional charges, for example, for medication management, a specified number of care hours, or for the comprehensive care provided in a memory care environment.
- Check the credentials of the insurance company from which you plan to purchase your policy using a site such as A.M. Best. Only purchase from a highly rated and established company. Additionally, ensure with your state insurance department that the policy provider is licensed to do business in your state. Ask the state insurance department how often the company raises their rates and how quickly they pay on claims.
- Don't hesitate to reach out to a State Health Insurance Assistance Program counselor or an elder law attorney for help in determining if long-term care insurance is right for you.
It's never too early to begin thinking about long-term care and making plans to cover the expenses it requires. Many times, you have funding options, such as those discussed earlier, that are better than relying upon Medicaid to cover the expenses of long-term care. An insurance agent, a financial planner or an elder law attorney can advise you on what works best in your given situation.
If protecting your family's assets is important, you should consider long-term care insurance, a trust, annuities or a life settlement; otherwise, you'll be forced to rely on Medicaid and a forced spend down.
Don't wait to discuss your long-term care plans with your family. Talking about healthcare needs and wants, finances and death is uncomfortable and awkward, but necessary. Don't leave your family guessing as to what your wishes may be. Sit down and discuss these issues while you're able, making your wishes and plans known. When an injury or illness such as dementia strikes, it may be too late to make your wishes known.
Before making any decisions about long-term care, talk to people you trust to help you make the right decisions for you and your family. Trusted advisors could include:
- Family members
- A financial planner
- An elder law attorney
- Your doctor or another healthcare provider
- A social worker
- A discharge planner, if you're in the hospital
- A person-centered counselor
Online sites and local organizations you might find helpful include: