Nursing Homes May Bankrupt You. In-Home Care is Not Cheap. Better Have a Plan Now

Most long-term health care is delivered at home. Nursing homes, memory care facilities, and assisted living facilities are expensive. Growing demand for care services and increased labor costs push all long-term care costs even higher. Planning with LTC Insurance is an easy solution.

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Nursing Homes May Bankrupt You. In-Home Care is  Not Cheap. Better Have a Plan Now
8 Min Read June 27th, 2015 Updated:December 31st, 2021

Longevity has become a big concern for retirement planning. The costs of long-term care services and supports will often drain savings and have a negative impact on income. For couples, this will have a dramatic effect on a couple's lifestyle, even if they have substantial savings. 

The growing demand for long-term care services and higher labor costs make expensive long-term care even more expensive. Rapidly rising costs are creating an even great financial strain on American families unless they have Long-Term Care Insurance paying for some of the costs.

Not only are nursing homes expensive, but as a result of what we learned from the virus crisis, avoiding a nursing home is probably a good idea. Nursing home use and dropped for a decade, and the virus crisis makes other types of long-term care more attractive. However, nursing homes have prioritized improving the conditions to decrease the risk of virus infection.

Quality nursing homes, assisted living facilities, and memory care facilities are very costly. The cost of home health is also not cheap. Quality care providers offer outstanding care, but the financial impact will also drain assets and adversely impact income and lifestyle unless you have the resources or an advance plan.

The cost of this care does vary depending on where you live. According to the LTC NEWS Cost of Care Calculator, the national average of skilled care in a nursing home is over $103,000 a year. But costs of all types and levels of long-term health care are rising as well. Depending on where you live, there could be shortages of some types of care.  

Most Extended Care Starts at Home

However, most long-term care is provided in your own home. According to the American Association for Long-Term Care Insurance, about 73% of new LTC Insurance claims start with the policyholder receiving care in their own home. 

Some 18% begin their claim receiving benefits at an assisted living facility. Only 8% start benefits in a nursing home. or other facilities like adult day care centers, assisted living facilities, memory care centers, and traditional nursing homes. 

More people than ever will need long-term health care due to declining health, mobility problems, and other aging-related issues, including dementia. Since the chance of needing some type of care service in your life is so high, addressing the financial costs and burdens of aging is a vital part of an overall retirement plan.

Don't Expect Health Insurance or Medicare to Pay for Long-Term Health Care

Health insurance, including Medicare (including supplements), pays only a small portion of skilled services. Most long-term health care is custodial in nature (help with daily living activities or supervision due to memory loss) and not covered at all by any insurance other than Long-Term Care Insurance. 

Many people ask about Medicaid benefits. Medicaid will only pay for long-term care services if you have little or no income and assets. For most people, this is not desirable for many reasons, including the overall quality of care provided through Medicaid since Medicaid providers receive much smaller reimbursement compared to non-Medicaid provers. 

In 2021, the top insurance companies paid over $12.6 Billion in benefits, much of it for in-home care. The question remains, are you prepared for the high costs of long-term care and the impact it will have on those you love in the decades ahead? 

Family Members or Spouses Are Not Best for Caregiving

Yes, paid care is expensive. Caregiving is hard, and your children will have their own careers, families, and responsibilities. Plus, you are not the only one getting older! Think again if you think your children or spouse will become caregivers. 

The strain on family and finances is why so many experts suggest having a plan in place before your retirement. Many American families depend on Long-Term Care Insurance to safeguard income and assets and reduce the stress and anxiety otherwise placed on our loved ones. 

Yes, you and your spouse are aging, and your future older spouse will not be able to handle being a caregiver. However, when you need care, your children will also be older. Aging happens to everyone, which is another reason to think about planning ahead.

But remember, long-term care is both a cash flow issue and a family issue. Many people don't want to place the future responsibility of either caregiving or managing their future care on their family. Often, this falls on a daughter or daughter-in-law without an advance plan.

Family caregivers are unprepared and untrained for a very stressful and physically and mentally demanding job. Plus, family caregivers must juggle careers and family responsibilities with their job as a caregiver.

A recent article in Motley Fool suggests the cost of extended long-term health care has a significant impact on your future retirement. The costs could even be to the point where you may end up spending down a majority of your assets, forcing you to access the Medicaid program.

 "There are many things to look forward to in the future, but there are plenty of things we worry about, too. Many people worry about their health and dread certain potential outcomes, such as becoming unable to care for themselves and perhaps ending up in a nursing home. That alone is an unpleasant thought, and nursing home costs can be another."

Motley Fool article written by Selena Maranjian

She writes that nursing home stays are less today than in the past. However, this is not due to fewer people needing extended care services. More home care options are available in addition to adult day care and assisted living. Today there are just more options than ever before for long-term health care.

The article suggests that the costs for Long-Term Care Insurance have been going up in recent years. However, premiums are affordable at the ages most people start researching coverage. For people in their mid-40's to age 65, you will find premiums very affordable, especially if you are married and in good health.

"Finally, remember that, when you start having trouble caring for yourself, there might be less expensive options than a nursing home, at least for a while. An assisted-living facility might do (Genworth cited a national median annual cost of $43,200 for that), while home health aides cost a national median of about $20 per hour. Twenty hours per week of that would approach $21,000.

It's worth spending some time now thinking about how you would pay for nursing home costs -- or other long-term care costs, for that matter. A little planning now might prevent panic or desperation later."

Selena Maranjian 

"When it comes to Long-Term Care, the vast majority of care is provided in the home."

Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI), a leading consumer advocacy group

The rate for a home health aide averages $21 an hour according to the latest report published by the AALTCI.

"Just over half of all Long-Term Care insurance claims start with the policyholder receiving care at home."

"First, that's where most of us would prefer to be as opposed to a nursing home setting and the insurance policy benefits make it possible for people to get that needed care at home."

"People buying Long-Term Care insurance today need to understand that having insurance that pays some but not all of the cost is a prudent way to plan."

"It's also a way to make this protection very affordable, with a 55-year old paying around $100-to-$130 a month for protection."

Jesse Slome

Slome advocates the 'Good - Better - Best approach to Long-Term Care insurance planning.

The Association offers free access to a video explaining how to reduce the cost. The videos can be found at

Long-Term Care Insurance Offers an Affordable Way to Prepare Family and Finances

Affordable Long-Term Care Insurance gives you access and control. You will have your choice of quality care in the setting you desire without placing a burden and stress on your loved ones. 

Plus, policies protect your income and savings. Your family doesn't need to go into a crisis because of your future aging and health needs. You can safeguard your income and assets and ease family stress with an affordable Long-Term Care Insurance policy. 

The key is to plan before you retire when premiums are very affordable and you still enjoy good health. Start your research by reading The Ultimate Long-Term Care Guide.

Always use an experienced Long-Term Care Insurance specialist. Most general insurance agents and financial planners are not qualified in this area. Be sure your specialist works with the major insurance companies, not just one or two. Also, be sure they have enough experience where they have processed claims. 

Find a trusted and experienced Long-Term Care Insurance specialist by clicking here

Don't ignore the future costs and burdens of aging. Keep control over your finances, and maintain your independence by planning now. Your health can change at any time - it is your fairly good health today that allows you the opportunity to prepare.

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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

Many people realize the necessity of having a plan for long-term health care. Nonetheless, many have not yet done so. Some people think LTC Insurance is too expensive (it's not). Others assume it can be complicated (it can). Planning before you retire is crucial.

No matter if you need care due to an illness, accident, or cognitive decline, Long-Term Care Insurance gives you access to your choice of quality care, including in-home care. You will protect your income and assets and reduce family burden.

Use the many resources available on LTC NEWS to help you plan for the financial costs and burdens of aging. Remember, we will need care in the future due to an illness, accident, or just the impact of aging. Care costs are expensive, and the stress on the family is high. However, Long-Term Care Insurance is easy and affordable for most people.


These links will help you find valuable tools on LTC NEWS to help in your research:

Long-Term Care Insurance Guide 

Long-Term Care Insurance Tax Guide 

Frequently Asked Questions 

State Comparisons 

Insurance Company Comparisons 

It is always best to plan before your retirement, ideally in your 40s or 50s. Find a qualified and trusted specialist by clicking here. 

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Find Quality Caregivers and Long-Term Care Facilities

If your parent or loved one needs care now - or soon - you will need to find the appropriate care in the right setting depending on their needs.

Take a moment and read - 

Benefits of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.  

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement. 

Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

Get Expert Help Filing an LTC Insurance Claim

LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with your Long-Term Care Insurance policy. 

You can also get support in finding quality caregivers and get recommendations for a proper care plan, whether a person has a policy or not. - Filing a Long-Term Care Insurance Claim | LTC News

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