If you are 65 or older, there’s a 70% chance you will need long-term care at some point in your life. Yet, only 3.3% of Americans have long-term care insurance. This leaves most older adults unprepared. With costs estimated over $100,000, long-term care should be an important part of your retirement planning.

What is Long-Term Care?

Before we can understand the ins and outs of long-term care, we need to understand the basics of what it is.

Long-term care is formally defined as “a range of services and supports you may need to meet your personal care needs.” More specifically, it includes two types of assistance.  First, is activities of daily living (ADLs). This includes things such as dressing, bathing, using the bathroom, and more. Second, is instrumental activities of daily living (IADLs). These are things like cleaning, paying bills, preparing meals, and medication management, among others.

5 Things You Need to Know About Long-Term Care

Long-term care is broad. It can encompass a wide range of types of care, locations, costs, and more. Here are 5 things you should know about long-term care.

1.     Long-term care is more than a nursing home.

What’s the first thing that comes to mind when you think about long-term care? If it’s a nursing home, you aren’t alone. What you think of as a typical nursing home is often synonymous with long-term care. At times, it’s also referred to as a skilled nursing facility or a healthcare center. These settings typically offer 24/7 skilled care provided by nursing staff. While it is long-term care, it is only one of many types that are available.

Another common form of long-term care is assisted living. Like a skilled nursing facility, assisted living offers residents help with their activities of daily living when needed and a nurse is available 24/7.

Long-term care can also exist beyond the walls of a facility or senior living community. For some, it can be found at home. Since long-term care is broadly defined as assistance with activities of daily living, it can include both family and paid caregivers.

2.     The average cost of long-term care is over $100,000.

No matter what type of long-term care you or a loved one may need, it can be expensive. The cost of long-term care can come as a surprise for many. According to some reports, it could cost you well over $100,000. While a majority of older adults will need long-term care during their lives, most are unprepared for the financial burden.

3.     Long-term care can include home-based services.

One of the most common types of long-term care is home care. Many older adults find that they need extra assistance with some of their daily activities but don’t want to leave their homes. Hiring someone to provide care at home can be a great solution in these situations. It’s also one of the most expensive forms of long-term care. In Ohio, the average cost of home care is $26.50 per hour. So, if you need 8 hours of home care a day, it may cost you more than $200 per day. The cost of in-home care can add up quick, which is why it can often be the most expensive option. In comparison, the average cost of assisted living in Ohio is approximately $175 per day, including room and board.

4.     Medicare, Medicaid, and other private medical insurance don’t always cover long-term care.

There is a common misconception that long-term care is covered by Medicare, Medicaid, and other private medical insurance. While that type of insurance can cover long-term care, it can be limited and may not provide the care that you want. It can cover care in a skilled nursing facility and some home care but not care in an assisted living community. It also may not cover the amount or type of care that you want or need.

5.     Long-term care insurance can give you flexibility and choice.

With most traditional medical insurance, you’ll be stuck paying out of pocket for assisted living and may have to share a room. Long-term care insurance can give you the financial freedom to choose the care you want. Every policy offers different coverage. However, most policies include coverage for assisted living. With the right policy, you’ll also have the flexibility to choose the community or facility you want with a private apartment or suite.

Importance of Planning

Long-term care planning is a crucial element of any retirement plan. At it’s core, it’s about knowing what you want your experience to be and making sure you have a plan to make it a reality. The same way you have financial plans for buying a home, starting a business, or retiring, it can be important to create a financial plan for long-term care. While there’s a chance you may not need it, the truth is that a majority of us will. Planning now sets us up to have the life we want later.

Always Ask a Professional

Long-term care insurance can be a valuable tool in your retirement and long-term care planning. You’re likely familiar with many types of insurance. While long-term care insurance has some similarities, it’s also a lot different. For example, like most insurance policies, long-term care insurance has premiums. However, unlike many types of insurance, you often can’t get a long-term care insurance policy on its own. It’s often found in combination with other planning tools, like annuities.

When it comes to planning for your future, it’s always best to talk to a professional. Long-term care insurance and planning are no exception. An expert can help you decide on the retirement and long-term care plans that are right for you and your loved ones.

Hear from an Insurance Professional

If you’re ready to learn more about the importance of long-term care insurance and planning, this podcast episode is for you. We sat down with Cameron Titlow, insurance professional, and asked him what you should know about long-term care planning. Hear him explain the importance of long-term care insurance and the steps you can take to future-proof your finances.

The Ohio Masonic Communities has three senior living communities across the state of Ohio – Browning Masonic Community in Waterville, Ohio, Springfield Masonic Community in Springfield, Ohio, and Western Reserve Masonic Community in Medina, Ohio. If you are interested in learning more give us a call at 1 (877) 881-1623 or contact us here.