Long Term Care – “Points of Interest” and Tidbits

  • Most health insurance (including Medicare) does not cover the medical and nursing expenses associated with a chronic illness or disability.
  • Medicare is designed for acute care needs, not chronic long-term care costs.
  • In 2001 the average daily cost for private nursing home care was $112 ($40,880 per year) in Missouri and the national average cost was $150 ($54,750 per year). These amounts do not include costs for therapy, rehabilitation, or medications.
  • Average stay in a nursing home is 2.6 years.
    Nursing home residents fall into two main groups:
    1. Those that stay a short time, normally less than 6 months. This encompasses over half of all nursing home residents.
    2. Those who stay for a long time, averaging about 5 years.
  • An AARP study revealed that only 15 percent of the participants were able to accurately estimate the cost of nursing home care in their part of the country – most under estimated the cost.
  • There is never a good time to buy long-term care insurance. Premiums escalate as you age, a plan that costs a 50 year old $1,625 annually will cost a 60 year old $3,100 and a 70 year old $7,575.
  • People age 65 or older face a 40% lifetime risk of entering a nursing home.
  • One in two people over age 85 require care and assistance with activities of daily living.
  • Odds of using insurance coverage:
    Home fire and damage1 in 1,200
    Auto damage and liability1 in 250
    Long-term care2 in 5
  • Who is paying for long-term care (2001)
    Medicaid43.8%
    Out of pocket24.6%
    Medicare13.7%
    Private insurance10.3%
    Other 7.5%
    Source: Dept. of Health & Human Services
  • Where long-term care is provided:
    Home Care
    Assisted Living
    Nursing Home
  • Activities of Daily Living (ADLs):
    Physical:Instrumental:
    EatingDriving a car
    WalkingUsing a phone
    ToiletingPaying bills
    Transferring from bed to chair
    Dressing and grooming
  • Causes for use of extended care include:
    Alzheimer’s disease strokes
    Parkinson’s diseasediabetes
    emphysemesenile dementia
    arthritisdepression
    cancer
    heart disease
  • Six main reasons people purchased long-term care insurance:
    Don’t want to be a burden
    Access to quality care
    Asset protection
    Control and independence
    Aversion to welfare
    Peace of mind