Long Term Care Planning

Whether you are part of the “sandwich generation” ― caring for both your kids and your parents ― or you are aging yourself, eventually some form of long-term care may be necessary in your family.

Morningstar reports that 70 percent of those who turn 65 will need long-term care at some point in their lives, with nearly 50 percent requiring paid long-term care services.[1]  Women are even more likely to need care.  If you do require care, the average need for long-term care is somewhere between 2 to 3 1/2 years.  Women generally need a longer duration of care, at an average 3.6 years versus men at an average of 2.5 years.[2]  Keep in mind that these are just averages; some people will require less care near the end of life and others may require significantly more.

When might you need long-term care?

In general, you are deemed to require long-term care services when you need help with two of the six following activities of daily life:

• Eating
• Bathing
• Dressing
• Continence
• Getting in and out of bed or a chair
• Using the bathroom

In addition, cognitive issues can also result in the need for long-term care services.[3]

How to seek the right care

There are many options available, which can look different for every individual.  Some options include:

• Stay in-home and receive care from your spouse or partner
• Age in place with caregivers brought into the home
• Move in with family members so they can be caregivers
• Assisted living facilities
• Continuing care retirement communities
• Adult care homes
• Skilled nursing facilities

Cost of care

The cost of care can be expensive based on the level of care you need.  For example, based on 2023 data, the annual median cost of care for a private room in a skilled nursing facility in the Seattle area is $164,250 per year.  The annual median cost for an assisted living facility is $91,800 per year. If you utilize a home health aide in your home part-time, the average annual median cost is $100,672.  If you require around-the-clock care, this can cost even more. [4]

Ways to pay for care

• Self-insure: Save enough money in advance for long-term care costs that you might incur in the future.
• Long-term care insurance: Purchase a long-term care insurance policy to cover some or all of your future long-term care expenses.
• Family members pay for care: If you don’t save enough money or don’t have long-term care insurance, family members can help pay for long-term care expenses.
• Utilize Medicaid: Spend down your assets to qualify for Medicaid-funded long-term care. In Washington State, this would require you to spend down your liquid assets to $2000 as a single person, or $3000 for married couples. [5]

The long-term care bottom line

It is important to plan for the potential of future long-term care costs before you need it.  Carefully consider how you or your family members would want to receive care in the future if needed and your potential funding options.  Planning ahead can make these life milestones easier for you and your loved ones. Discuss your ideas and wishes with your family and loved ones in advance so they know what is important to you and can be part of the planning process.

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[1] “100 Must-Know Statistics About Long-Term Care: 2023 Edition,” by Christine Benz; Morningstar; Mar. 29, 2023; https://www.morningstar.com/personal-finance/100-must-know-statistics-about-long-term-care-2023-edition

[2] Department of Health and Human Services.  https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf

[3] Centers for Medicare and Medicaid Services.  https://www.cms.gov/research-statistics-data-and-systems/research/mcbs/downloads/2008_appendix_b.pdf

[4] Genworth Cost of Care Survey, December 2023.  Skilled nursing facility costs based on 365 days of care.  Assisted Living costs based on 12 month of care in a private one bedroom.  In-home care based on 44 hours a week for 52 weeks. https://www.genworth.com/aging-and-you/finances/cost-of-care

[5] Wahington State WAC 182-519-0050 https://app.leg.wa.gov/wac/default.aspx?cite=182-519-0050