For Mark Roberts’ Use: It may not be the most pleasant thought, but the possibility of needing long-term care should factor into retirement planning. With an estimated seven out of ten people over age 65 needing long-term care* at some point, odds are fairly high that most retirees or their spouses will face this situation. While some retirees may be fortunate enough to remain in their own homes with help from family, many will eventually face expensive, full-time care in a nursing home or assisted living facility.
The cost of long-term care varies depending upon the type of facility and the general cost of living of one’s particular city or state. However, a look at the national median costs** of assisted living facilities and nursing homes lends valuable insight to financial planning for retirement. The median monthly rate for assisted living homes is $3,300 per month, or $39,600 per year. A private room in a nursing home is even more expensive, at $222 per day, or $81,030 annually. With one of five of those who enter nursing care remaining there for at least five years***, it’s easy to see how the likelihood of needing long-term care should factor into retirement planning.
Those who plan to rely on Medicare for nursing care costs should be aware of the limitations of the program. Skilled nursing care might be covered if it is necessary to improve the patient’s condition. After a qualifying 3-day hospital stay, a physician must authorize admission to the nursing facility within 30 days. Medicare will pay for covered services for the first 20 days, with the patient responsible for any co-pays. After 20 days, and through the 100th day, the patient is responsible for a daily co-payment. After 100 days in the nursing facility, Medicare will not pay for the facility at all. Obviously, Medicare is very limited in its coverage of nursing care, and it’s important to remember that qualifying for the program itself can be difficult.
Keeping these facts in mind, the best course of action is to be prepared for the possibility of long-term care.
*National Clearinghouse for Long Term Care Information, 2012
**skillednursingfacilities.org, 2012
***Medicare.gov, 2012
