Long Term Care . . . What is It?
Long-term care (LTC) is the assistance provided to a person who has a condition or cognitive impairment that limits one’s ability to execute basic daily living activities. In addition to LTC services provided in a nursing home setting, assistance may oftentimes be provided through a community resource, in an assisted living facility, or a patient’s home.

The Cost of Care
The cost of care varies with the level of services provided. For example, an eight-hour shift for a home health aide, secured through a professional agency, averages almost $120/ day. Nursing facility costs run higher, averaging $150 / day. Thus, even a two-year stay in a nursing home could easily cost $110,000. With the likelihood that these costs will continue to increase in the future, an already expensive need could be significantly more expensive in 10 or 20 years, or at such time that you might need long-term care.

Who Pays for Long-Term Care?
While there are a number of sources that can help pay for long-term care, ultimately, the responsibility for paying long-term care services falls to those who incur the services. Medicare helps those over 65 or permanently disabled pay for medical expenses (physician charges, surgery, and hospitalization) and some limited skilled nursing care. Custodial care, the most prevalent form of long-term care, is not covered by Medicare. Medicaid will pay for long-term care costs, usually only in a nursing home setting, for those who qualify based on income / asset levels. Medical Insurance is not intended to cover long-term care costs, as its focus is to pay for services that help to restore normal health.

Presently, 35% of all long-term care services are financed directly by the patient, normally out of savings, investments, or asset (home) liquidation. It is estimated that today’s 55-year-old would need to accumulate $300,000 to pay for two years in a nursing home by the time he or she reaches age 85.

Hoban Benefit Consulting Co.
Malvern, PA 19355
(610) 644-9880 / (610) 644-9885 (fax)
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