Long Term Care Information

1. What is long term care?

Long term care refers to the day-in, day-out assistance you need when you have a serious illness or disability that lasts for a period of time and you are not able to take care of yourself. Long term care includes a wide range of services delivered in your own home, or in adult day care centers, assisted living facilities, continuing care communities and nursing homes. The level of care may be skilled or intermediate, but most frequently is at a custodial or personal level of care. 95% of the people who reside in nursing homes are receiving custodial care.* The need for custodial care may be the result of an injury, illness, chronic condition or the frailty of aging where, a person requires assistance with activities of daily living (ADL) such as bathing, dressing, feeding, mobility, toileting, taking medications or continence.

* Life Insurance Selling, December, 1992.


2. What are the chances that you will need long term care?

Sixty percent of people will require long term care at some point in their lives.* The older you are, the greater the probability that some of long term care will be required. Of those entering nursing homes, half will stay less than three months, many requiring care as part of a convalescing process. The average stay will be a little over 2 1/2 years.**

* Washington Post, April 1996
** American Association of Homes for the Aging, 1989


3. How much does long term care cost?

The current cost nurses’ aides or home health aides range from $10 to $20 per hour. Home health care can amount to $40,000 per year. The cost of nursing homes in Florida averages $160 a day - that's an annual cost of $58,400.


4. What is the future cost of long term care?

Assuming a 5% annual inflation rate, the annual cost of a nursing home stay

- in 10 years will amount to $ 90,597
- in 20 years will amount to $ 147,571
- in 30 years will amount to $ 240,374

In 30 years, assuming an annual inflation rate of 5%, the average cost of a 5 year nursing home stay will total $1,328,212.

5. Doesn't Medicare, my Medicare Supplement Policy, or my catastrophic policy cover long term care expenses?

Coverage is generally very limited. After at least a 3 day hospital stay, if continuous skilled care is required in a skilled nursing facility, then Medicare may pay in full up to 20 days and the excess amount above $101.50 per day (2002 figure) up to a maximum of 100 days. Medicare supplements will reimburse the $101.50 per day (2002 figure) of Medicare approved expenses in a nursing home. Less than 5% of nursing home income is derived from Medicare and Medicare Supplements.** In certain situations, if skilled care is required at home, Medicare may pay. It is estimated that Medicare paid only 15% of home health care costs.**

** Health Care Finance Administration, 2002.


6. Who pays for long term care?

Medicare, Medicare Supplements, and major medical health policies specifically exclude custodial care.

Source: Health Care Financing Administration. 1997.