Most people don’t want to think about the possibility of someday needing long-term nursing care, but it is very important to consider this factor when planning for retirement. Odds are high that most retirees or their spouses will face this situation; an estimated 7 out of 10 people over age 65 need long-term care at some time during their lives*. In some cases it is possible for the patient to remain in their home and receive help from family or live-in assistance, but many retirees will eventually face the expense of full-time care in a nursing facility.
The type of nursing facility required, as well as the general cost of living in the area, will influence the cost of long-term care for any particular individual. Taking a look at national median costs** of nursing homes and assisted living facilities, however, is a good starting point for preparing for the potential expense. The median rate for assisted living homes amounts to $3,300 per month, or $39,600 per year. That’s a bargain compared to a private room in a nursing home, which may cost $222 per day or $81,030 per year, according to the national median costs. It’s important to remember, also, that nursing home stays are not always a temporary event. One in five nursing care patients remains in the facility for five years or more***.
Unfortunately, Medicare cannot be relied upon to cover these expenses in the event that long-term care is necessary. The program comes with limitations, and qualifying for the program can be difficult. Long-term nursing care is only covered under certain circumstances: It must be medically required in order to improve the patient’s condition, and a doctor must authorize admission to the nursing facility within 30 days of a qualifying 3-day hospital stay. If these requirements are met, Medicare will pay for covered expenses during the first 20 days of the nursing home stay, though there is a co-pay for the patient. Between days 21 and 100, the patient is liable for a daily co-payment. After 100 days in the nursing facility, Medicare will no longer pay for the facility and the patient will be responsible for the bill.
Keeping the facts in mind, as well as the limitations of the Medicare program, it is easy to see why retirement planning should always include the possibility of long-term care expenses.
*National Clearinghouse for Long Term Care Information, 2012