Covering the Rising Cost of Long Term Care

Covering the Rising Cost of Long Term Care

As we get older, the thought of needing some type of long term care becomes a reality. The question of how to pay for it is also on the top of the list.
JOPLIN, MO.--- As we get older, the thought of needing some type of long term care becomes a reality. The question of how to pay for it is also on the top of the list. Many are unaware how much it costs to move into a long term care facility or have someone come into your home. You may also be unaware of all the ways you can prepare for the rising costs.

It's not something people like to think about, needing long term care, whether that means an assisted living facility, skilled nursing, or someone to simply come and stay in your own home. While these are the three main options, the cost of each differs. Especially, depending on the level of care needed. Mark Vonmoss with the Insurancecenter suggests looking into long term care insurance. 

"Long term care insurance is a way for individuals to finance custodial care, maybe skilled nursing facility, rehabilitative care at home, or in a long term care facility," said Mark Vonmoss, Insurance Center.

Mark says the main thing these policies cover is the assistance with activities of daily life. Things that aren't usually covered by Medicare or Medicaid.

"A strictly long term care policy, it's expressed in a daily dollar amount of benefit. The waiting period is the thing to keep in mind. I can pay for the first six months out of my pocket or 90 days, however long that $150 per day benefit, then you have the years one, year two, years five, years or lifetime," said Vonmoss. 

While this is an average policy, changing the waiting period, the cost per day, and the age you are when you purchase the policy all effects how much you'll have to spend per month to purchase the policy. The waiting period refers to the difference between the time you move into a facility and when the policy starts paying. For example- a 90 day waiting period, meaning you live there for 90 days, you pay the bill yourself during that time and then the policy kicks in. The key is the cost of your premium changes based on the length of your waiting period.

"Really, people start thinking about it around 55 or 60 and that's still a good age to talk about it because that's still a young enough age that it's not going to be cost prohibitive most of the time," said Vonmoss. 

Vonmoss says it's important to know that the policy is medically underwritten, so you have to qualify medically as well. The younger you are, the cheaper the monthly premium is. Stephanie Miller is the administrator at Foxberry Terrace and Assisted Living Facility in Webb City. She recommends people look into the insurance even earlier and she says you'd be surprised how many of their current residents have long term care insurance.

"Surprisingly, quite a few have long term care insurance. Out of the current residence we have here at Foxberry, there is probably a quarter of them that have long term care insurance and these residents are in their late 80's or early 90's. What they had initially taken out was a nursing home policy and as time progressed writers have been added to that. So, it would also cover assisted living," said Stephanie Miller, Foxberry Terrace Administrator.

Miller says if you don't have long term care insurance, you will be what's called "self pay," meaning you will have to cover the costs all on your own.

"Preplanning, I am strongly suggesting to people to look into long term care insurance," said Miller. 

Vonmoss says if you don't have long term care insurance or think it's two expensive.

"There's other ways that the insurance industry has come up with the finance and that's with annuities and life insurance," said Vonmoss. 

The bottom line is, overall cost of care is high. So, just how much does it cost to move into an assisted living or long term care facility? Miller says you can expect to pay $125 to $150 per day in our area. At $125 per day, that's roughly $3,802 per month or $45,625 per year. Mark says the cost of a typical long term care policy is $185 per month for $150 per day of coverage for two years with a 90 day waiting period, which is a basic policy for a 55 year old. The policies are highly individualized so this is only a rough estimate.

The cost of in home care is even more. The average cost to have someone in your home is $12 to $16 per hour, and most need 24 hour care. Here's the breakdown- roughly $14 per hour for 24 hours is $336 per day. That's $10,220 per month and $122,640 per year. Mark says only some policies cover in home care.

If you have questions or comments about this story, feel free to post them on Philip Mitchell's Facebook page or send him a tweet. It's Facebook.com/philipgrantmitchell or on twitter at philipgmitchell.

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