How Much Do You Know About Long-Term Care Costs?
Not only are there wide - spread misconceptions about the costs of long-term care services, but few seniors are setting aside funds to address those needs, according to a national survey by the Associated Press-NORC Center for Public Affairs Research. Fifty-eight percent of adults surveyed underestimate nursing home costs and overestimate what Medicare will cover.
Yet chances are high that you will need long-term care. In 2012, an estimated 43 million individuals were 65 and older. The U.S. Department of Health and Human Services projects that 70 percent of seniors who reach 65 will need some type of long-term care services in the future.
How expensive is nursing home care getting? According to the Genworth Financial 2014 Cost of Care Survey, the national median annual rate of nursing home care is $87,600 and is growing at a much greater rate than home care. Who pays for long-term care services? The majority of spending on "formal" or paid long-term care services comes through government programs like Medicaid, Medicare, and the Veterans Health Administration. Medicaid is the single largest payer at $136.3 billion, or 42% of spending. But that undoubtedly underestimates the full cost of care since it does not include uncompensated care provided by family caregivers.
Americans, particularly females, are providing care themselves for aging parents or relatives. By doing so they put their own finances at risk. The average caregiver spends almost 20 hours a week providing unpaid care for nearly five years. A 2011 study from Met life estimates that caregivers will lose more than $324,000 in wages, Social Security and pension benefits over a lifetime.
Huge costs are at stake, yet Medicare covers only brief nursing home stays and only when the patient spends three days in the hospital. But qualifying for that benefit has gotten significantly more difficult for seniors to achieve. In recent years, growing numbers of Medicare beneficiaries have been hit with large unfair costs for nursing home care because their stay in the hospital was for "observation status" — instead of for inpatient care — even though the stay may have lasted longer than three days. TSCL supports the Improving Access to Medicare Coverage Act introduced by Sen. Sherrod Brown (OH), which would allow the time patients spend in the hospital under "observation status" to count toward the three-day hospital stay requirement for Medicare coverage of skilled nursing care.
Take a test of your long-term care knowledge here.
Sources: Long-Term Care: Perceptions, Experiences, And Attitudes Among Americans 40 Or Older, The Associated Press-NORC Center For Public Affairs Research, April 2013. Genworth 2014 Cost of Care Survey, https://www.genworth.com/cost-of-care/landing.html.