What does long-term care cost?

Long-term care can be very expensive and the real amount you will spend depends on the level of services you need and the length of time you need care. One year in a nursing home can average more than $50,000. In some regions, it can easily cost twice that amount.

Home care is less expensive but it still adds up. Bringing an aide into your home just three times a week (two to three hours per visit) to help with dressing, bathing, preparing meals, and similar household chores can easily cost $1,000 a month or $12,000 a year. Add in the cost of skilled help, such as  physical therapists, and these costs can be much greater.

The average monthly fee assisted living facilities charge is around $2,000. This includes rent and most additional fees. Some residents in the facility may pay significantly more if their care needs are higher.

Who pays the bills?
For the most part, the people who need the care pay the bills. Individuals and their families pay about one-fourth of all nursing home costs out-of-pocket. Generally, long-term care isn’t covered by the health insurance you may have either on your own or through your employer.

Medicare supplement insurance (often called Medigap or MedSupp) is private insurance that helps cover some of the gaps in Medicare coverage. While these policies help pay the deductible for hospitals and doctors, coinsurance payments, or what Medicare considers excess physician charges, they do not cover long-term care.

Medicaid - the federal program that provides health care coverage to lower-income Americans – pays almost half of all nursing home costs. Medicaid pays benefits either immediately, for people meeting federal poverty guidelines, or after nursing home residents exhaust their savings and become eligible. Turning to Medicaid once meant impoverishing the spouse who remained at home as well as the spouse confined to a nursing home. However, the law permits the at-home spouse to retain specified levels of assets and income.

It’s impossible to predict what kind of long-term care you might need in the future, or know exactly what the costs will be. But like other insurance, long-term care insurance allows people to pay a known, affordable premium for a policy to protect against the risk of much larger out-of-pocket expenses.

Since it’s likely you will need long-term care, you should learn about the insurance coverage available to help that’s most appropriate for you.