Most either don’t know, or refuse to accept, the facts surrounding the potential need for long-term care—not to mention the exorbitant cost associated with it. This was reconfirmed recently in a telephone survey of 1,735 Americans over the age of 40, funded by the SCAN Foundation and conducted by the AP–NORC Center for Public Affairs Research. This survey highlights many common misconceptions about long-term care, including the potential that a loved one may need some sort of long-term care within the next 5 years; lack of understanding of who will pay for care (Medicare? Medicaid? Private insurance?); and an increased lack of concern over failure to plan for the costs associated with long-term care.
Who Will Need Long-Term Care
According to the latest Genworth Cost of Care Survey, 70% of Americans over the age of 65 will eventually need some type of long-term care. By the year 2040, 22% of the population will be over the age of 65—a 10% increase since the year 2000. Even so, an increasing number of Americans over 40 refuse to believe they will ever need long-term care.
Cost of Care
Most people have no idea who actually pays for long-term care. The truth is that Medicare does not pay for ongoing long-term care (although it will pay for intermittent rehab stays in a nursing home).
As for private insurance, most health insurance plans will not cover long-term services like a nursing home, or ongoing care provided at home by a licensed home health care aide. Yet, the survey revealed that 18% of Americans age 40 and older believe that their insurance will cover nursing home care, while 25% believe their plan will pay for ongoing care at home.
Medicaid is the largest payer of long-term care services. Medicaid is a federally and state funded needs-based benefit that will provide for various types of long-term care depending on the state’s regulations. In 2013, Medicaid paid for 51% of the national long-term care bill, and as much as 66% of such costs in Alabama. Despite those figures, 51% of Americans age 40 and older reported that they don’t expect to have to rely on Medicaid to help pay for their ongoing living assistance expenses as they age.
The actual costs for long-term care are staggering. The Genworth Survey reported that, nationwide, the average bill for a nursing home is approximately $80,300 and for home health care, approximately $44,616, with a variety of options among and in between these levels of care.
Planning for Care
Most Americans are woefully unprepared. Only one-third of those surveyed were “very or extremely confident” in their ability to pay for long-term care. While many individuals reported being concerned over leaving family with debt or becoming a burden on loved ones, many decline to actually do anything about it. In fact, just over 30% of those over age 65 reported being concerned with such planning, while two-thirds of those over 40 reported that they had not undertaken any planning at all.
The survey points to the conclusion that most of us are reluctant to face the possible loss of independence related to aging. Apparently, this plays a role in the unwillingness to plan for the possibility of needing assistance later in life.
As an For example, there was an interesting difference in the number of people surveyed who had planned, or talked to loved ones about, their funeral arrangements (65%), in those who had discussed care preferences with family (42%) and in those who had saved money for long-term care (33%). Apparently it’s easier for us to talk to loved ones about our deaths than the potential future need for long-term care.