In-Home Care and Long Term Care Insurance
May 28, 2015
When most people think of long-term care benefits, they think of adult day care centers, nursing homes and hospice facilities. Each of these is an important component of the system when it comes to providing long-term care to America's elderly or chronically disabled. But if you ask most people whether they'd rather go to a nursing home or receive needed care and support in their own homes, the vast majority would respond that they want to stay home.
Fortunately, many long-term care insurance carriers are offering substantial home care benefits as part of their policies.
Cost of Long Term Care
The cost of providing long term care to a chronically disabled or cognitively-impaired individual who needs assistance handling the activities of daily living is high, and getting higher. The annual cost of long term care is expected to increase by 330 percent over the next three decades. By 2045, long term care could cost over $300,000 per year for a home health aide, semi-private room in a nursing home or assisted living facility.
Home care services aren't cheap, either. While you aren't paying for a facility, you can still expect to pay from $14 to $28 for a home health care/assistance aide from a quality agency.
On average, those using home aide services use about 20 hours of care per week. This service costs up to between $14,560 and $29,120 per year. That's enough to overwhelm most peoples' Social Security benefits and eat into any kind of private pension income.
Naturally, the cost of a skilled care nursing home can be up to three times that much, according to the recent 2015 Cost of Care study put out by prominent Long Term Care insurance carrier Genworth.
Genworth's researchers found that when it comes to most middle-income families, the potential costs of long term care were prohibitively expensive. Some markets were more expensive than others, but the median annual hourly rate for a licensed home health aide is $20 per hour.
Community based care, such as that available in an adult day care center, runs about $69 per day, on average, with the most expensive facilities in high-cost markets were charging up to $242.
Genworth also reports that the median average cost of a one bedroom single occupancy facility costs a median average of $3,600 per month, nationwide, or $43,200 per year, with local variations in cost (and quality) ranging from $600 per month to $11,250.
Meanwhile, the cost of a semi-private room in a nursing home runs an average of $220 per day, or $80,300 per year.
Is Home Care Worthwhile?
The appropriate level and milieu of care varies widely by individual and family circumstance. Some long term care insurance beneficiaries have family who are able to stay in or near home and provide service and support that can help keep costs down. And obviously, you can hire a lot of in-home help before your expenses amount to the cost of an assisted living facility.
Ask Your Agent
- What long-term care policies cover in-home health aids and services? How is the benefit defined?
- Is it paid to the family or the agency?
- Does it cover housekeeping assistance?
- Does it cover respite care for family members?
- Does it allow the family to designate a caregiver and have the company pay that family member as a home health aide?
- Do aides have to be licensed to be eligible for benefits?
- How long will benefits last?