A new report, published by ABC affiliate Kake.com, exposes how most Americans are unprepared for their long-term care needs in retirement. According to David Bynon, the report’s author, 52 percent of American seniors will need some type of long-term care services and support, yet most have no plan to receive it.
The problem, according to Bynon, is that most people mistakenly believe that long-term care is part of the services provided by Medicare, but it’s not. More generally, long-term care services are the personal care you may need if you are unable to eat, bathe, dress, transfer, or use the bathroom on your own.
“Medicare is designed to cover your major medical needs,” the author explains. “This is where so many people make poor decisions in their retirement planning. Most seniors who don’t have a solid family care plan or long-term care insurance end up turning to Medicaid for assistance.”
The report explains how long-term care insurance (LTCi) is the best way to prepare for the help needed as we age. LTCi helps pay for qualifying care in your home, an assisted living facility, or a nursing home. LTC kicks when you’re unable to perform two out of six activities of daily living (ADL). These include eating, bathing, dressing, transferring, toileting, and continence.
The author strongly suggests that carefully considering long-term care costs is an important part of retirement planning. He further explains that you can’t wait until you need care to buy coverage, because you’ll no longer qualify. “The best time to buy [LTCi] is in your mid-50s to mid-60s,” Bynon explains.
The U.S. Department of Health & Human Services (HHS) says that nearly half of all people turning 65-years-old today will develop a chronic condition or disability that necessitates long-term care services. According the HHS studies, most people will need care for less than two years, however, about 14% will need care for five years or more.
Without LTCi, the monthly cost of long-term care will quickly deplete the retirement savings of most Americans. According to the report, the average cost of assisted living in 2018 was $48,000 per year, and a semiprivate room at a nursing home facility cost nearly $90,000 per year. For those lucky enough to remain in their own home, home care services averaged around $50,000 per year.
Most people in their 50s and early 60s will qualify for long-term care insurance. However, the sooner you enroll the better, as premiums are calculated based on age, health history and where you live. Plus, most policies lock-in your rate, so your premiums don’t increase as you age. Insurers typically ask for a telephone interview, to go over your health condition, and will need to see your official medical records. With a clean bill of health, you can expect your policy in about four to six weeks.
David Bynon studies U.S. healthcare policy and writes about Medicare. His books are available on Amazon.com.
Release ID: 88941977