Long-Term Care Costs Vary Greatly By State and Type

Many people are now planning for Long-Term Health Care as part of retirement planning. Yet, while they may be buying Long Term Care Insurance they don't consider the cost of care which can vary depending on where one lives.

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Long-Term Care Costs Vary Greatly By State and Type
3 Min Read July 16th, 2015 Updated:June 22nd, 2020

One thing we know today is the cost of long-term care is expensive. However, according to cost of care surveys, there are variations on the prices of care services based on location, level of care, and amenities, and these differences are staggering.

The 2019 Genworth Cost of Care Survey examined the price of long-term care services and supports, breaking it out by private or semi-private room in a nursing home, home health aide, homemaker services, assisted living facility, and adult day health care. The data further drilled down into differences by state.

For example, the national median annual cost of a private room in a nursing home was $102,200. However, in Alaska, that same service cost a recipient $362,628, among the highest in the nation. By comparison, in Oklahoma, someone who wanted the same long-term care option would only need to pay a median cost of $67,525, or about one-fifth as much as in Alaska.

Several other cost of care surveys shows the same thing. Mutual of Omaha's report reports a private room in a nursing home is averaging $109,231. The national average of at-home care, based on a 44-hour week, runs $56,399. 

Cost of Care is Increasing Year After Year

Every survey shows the cost of care is increasing every year. The LTC News Cost of Care Calculator shows the national average cost of a skilled nursing home private room is now $106,488. True, most long-term care is delivered either at home or in assisted living facilities. These costs are less expensive but still not cheap!

The national average for an assisted living facility (base cost) now runs $50,924. Care at home, based on a 44-hour week average $53,402 a year. 

The cost varies depending on where you live. Find the cost of care in your area by clicking here

Advance Planning is Key to a Successful Future Retirement

Planning experts suggest that if you have assets to protect, Long-Term Care Insurance should be part of your retirement plan. The cost of care, especially care in one's home or assisted living, which most people need as opposed to a nursing home, needs to be factored in the benefit structure of any policy a consumer may purchase.

The problem with long-term care is it is both a cash flow issue and a family issue. Unless you plan ahead for your family and finances will be impacted. 

Jesse Slome, the executive director of the American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy group, says there are several ways to save on policies.

"Today's Long-Term Care insurance policy is quite different from the coverage offered a decade ago."  

"Insurers today offer a number of features and options that are not just extremely beneficial to consumers but can significantly reduce the cost."

Jesse Slome, the executive director of the American Association for Long-Term Care Insurance (AALTCI)

A Qualified Long-Term Care Specialist Can Design an Affordable Plan

Designing a plan that makes a catastrophic situational manageable is based on where you live, the average costs of care, and other factors. These factors include how you will finance your future retirement and family history. 

A Long-Term Care Insurance specialist is essential to assist in designing an appropriate plan. The AALTCI suggests working with a real specialist in this area.

Experts indicate that some insurance agents and financial advisors recommend benefits that are more than what you actually need. Also, premiums can vary over 100% between insurance companies. Shopping with a specialist will help you get accurate quotes and professional recommendations. They will save you money and give you peace-of-mind.

Get help when you plan for long-term care from a qualified and experienced Long-Term Care Insurance specialist. They should represent multiple insurance companies, understand how the Long-Term Care Partnership Program works, and have extensive claims experience. 

A qualified specialist will know how to design a very affordable plan which matches your age, health, finances, and goals.  Find a qualified specialist by clicking here.

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About the Author

An LTC News author focusing on long-term care and aging.

LTC News Contributor James Kelly

James Kelly

Contributor since August 21st, 2017

Editor's Note

Despite what you might think, Long-Term Care Insurance is very affordable. These policies are custom designed. Premiums can vary over 100% between companies for the exact same coverage. This is why you seek the assistance of a Long-Term Care Insurance specialist. Find a specialist by clicking here.

Be sure to ask the specialist about several important items:

  • Partnership – Most states offer special policies that provide dollar-for-dollar asset protection. The Long-Term Care Insurance Partnership Program might be one of the best-kept secrets in retirement planning. Make sure the specialist explains this program and how it might help you.
  • Tax incentives – There are federal tax incentives available for some people. If you own your own business be sure to ask.
  • Health Savings Accounts – If you have an HSA you can use the pre-tax money in your account to pay for the premium.
  • Asset-Based or Hybrid policies – These are life insurance or annuities with a rider for long-term care. Careful, only a handful are actually a long-term care benefit. However, one of these policies can provide you with the flexibility of both a long-term care benefit or a death benefit. They are expensive but can be paid with a single premium.

Make sure the specialist asks you detailed questions about your health, family history, and retirement plans. Underwriting criteria varies with each insurance company. If they are not asking you detailed questions then find another specialist.

It is always best to start planning before you retire. Once you have your plan in place you will enjoy peace-of-mind and your family will thank you decades from now.

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