Skilled Long-Term Care Costs Now Over $100k a Year

The costs of long-term care services continue to increase placing tremendous pressure on American families. Advance planning essential to a successful future retirement.

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Skilled Long-Term Care Costs Now Over $100k a Year
6 Min Read February 24th, 2017 Updated:January 8th, 2020

Studies now show that long-term care costs continue to rise with the cost of skilled long-term care remaining over $100,000 per year. According to a study released by a major insurance company, the national average price of a private nursing room is now reaching $105,485. 

Lincoln Financial Group's  "What Care Costs" study, shows the national average private skilled nursing room jumped roughly 3% since 2016. Semi-private room costs are less. Assisted Living facilities also are less expensive than care in a nursing home. Lincoln National is a major marketer of Long-Term Care Insurance products.

Most long-term care is not skilled care, nor is it nursing home care. However, the cost of all extended care continues to increase and impact more families as people continue to age and have age-related issues. 

Long-Term Care Services are Expensive

The cost of care varies dramatically from state to state. Louisiana, Oklahoma, and Missouri were the least expensive states at $68,620, $71,905, and $75,190 respectively for skilled care. Connecticut, Massachusetts, and Hawaii are the most costly states for skilled nursing home care with costs ranging from $169,725, $159,140, and $156,220, respectively.

People require long-term care services due to illnesses, accidents, or the impact of aging. Most people receive care at home first. The average national fee for a home health aide today is approximately $24 per hour, up 4% percent since 2016.  Skilled care at home is more expensive.  

As more Americans need more care, the costs will impact the savings of even more families.  The advances in medical science mean an even more significant number of people will require extended care. The increased costs of care will adversely impact the lifestyle of the individual and their spouse. 

A recent AARP report showed the tremendous impact of family caregivers who, many times become default caregivers in the absence of an advance plan.

“Today, more than one in two Americans turning 65 will need some form of long-term care in their lifetime, and the total number requiring care is expected to more than double by 2050.” 

Andrew Bucklee, senior vice president and head of insurance solutions distribution for Lincoln Financial Distributors.

“Those services are often attached to some significant costs that can impact retirement plans, savings, and assets, and importantly, the level of care one receives. That’s why it’s so important that people speak with their family and their financial advisor about their long-term care preferences and put a plan in place. Lincoln’s What Care Costs website can be a great starting point for these conversations and provide some clarity around the potential costs associated with long-term care.”

More Americans are now aware of the increased risk of needing some long-term care service during their lifetime. The problem is too many people fail to plan for the financial costs and burdens of aging.

Many people fail to plan for the consequences created by aging and long-term care. While many people focus on a nursing home, most care starts at home. 

Long-Term Care Insurance will pay for care at home. By receiving the appropriate care at home can help you avoid or delay the need for a formal facility.

"The number of Americans in their 70’s, 80’s and even older who live in their own home keeps increasing while the number of people living in institutional settings keeps decreasing." 

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

Long-Term Care Insurance Gives You Many Options

Long-Term Care Insurance gives you many options to provide you with access to your choice of quality care. Having a policy in place helps you not only protect your savings and income; it reduces the stress otherwise placed on those you love. 

Affordable Long-Term Care Insurance will pay for care at home or in a facility. There are three types of plans available. 

Asset-based "hybrid" plans, like those offered by Lincoln and other companies, are one type of available plan 

Hybrid policies offer a life insurance policy with a rider for long-term care. If you never need care, your estate will receive the death benefit. Usually, these are purchased with on single premium, although some companies offer alternative ways to pay, including an annual premium.

Traditional Long-Term Care Insurance provides benefits for your future long-term care needs but generally will not have a death benefit. Some policies offer, at extra charge, a return of premium if you never require care.  These policies are less expensive since you are not combining life insurance with long-term care benefits. Keep in mind, some people like the idea of having both in one product. 

Forty-five states offer Partnership Long-Term Care Insurance.  These partnership policies are only available with a traditional policy. These special policies provide you with additional dollar-for-dollar asset protection. 

Then there are so-called "short-term" policies that provide a smaller benefit but provide extra flexibility with both underwriting eligible age. These limited-duration policies can be purchased by those in their 70s or even 80s, depending on their ability to answer eligibility questions. 

Seek Help from Qualified Long-Term Care Insurance Speciailist

Keep in mind an experienced Long-Term Care Insurance specialist can discuss which type of plan best fits your retirement plans. Most financial advisors and general insurance agents lack a full understanding of these products and how they get used at the time of claim. Plus, specialists will generally represent all the major insurance companies, not one or two. 

You can find a trusted and experience Long-Term Care Insurance specialist by clicking here. 

Keep in mind your age, health, and family history will also be a factor in the cost and availability of coverage. The underwriting criteria vary with each insurance company.  Plus, just as important, premiums vary dramatically between insurance companies for the exact same coverage.

Age, Health, and Family History Impact Policy Choice

Be sure to have a Long-Term Care Insurance speciaist "shop your health" with all the companies to match your age, health, and other factors to get you the best coverage for the best value.

Many experts suggest starting your research in your 40's and 50's as part of your overall retirement planning. Many people don't want to think of a time they may need help with normal living activities or even supervision due to memory impairment. However, it is a part of aging.

Affordable Long-Term Care Insurance allows you, in advance, plan for these costs and the tremendous stress that extended care places on family members. 

Act now to safeguard your 401(k), IRA, 403(b), and other assets from the consequences of longevity. Start your research into Long-Term Care Insurance by using the tools available on LTC NEWS. See what is available 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

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