A report recently issued by HealthView Services, “Long-Term Care & Financial Planning,” summarized the likelihood that individuals will require long-term care (LTC) and the expected costs associated with such care. The study indicates that a healthy 65-year-old male/female couple has a 44% and 56% chance (respectively) of needing some level of LTC if each spouse attains their actuarial life expectancy. Combined, there is a 75% chance that at least one of them will require LTC.
The report also projected the future cost of LTC. Taking the same 65-year-old male/female couple, if they both only needed one year of LTC, their projected combined (national average, future value) costs are estimated at $398,000 for a nursing home or $223,000 for 44 hours of weekly home health care.
The trend to prefer in-home care, likely sparked by the pandemic, was also analyzed in the paper. In 2020, home health care spending rose by 6.0%, while nursing home expenses decreased by 7.8%. Current annual costs of home healthcare exceed $50,000 per year for 44 hours of weekly care, though spending can vary significantly based on the amount of care required. For example, 12 hours of home care a day roughly equates to the same cost as a nursing home, while 24/7 home care costs double a nursing home stay.
The impact on women, noted HealthView Services, can be acute. Women tend to live longer, and in same-sex couples are often younger than their spouses. If the husband needs care first, the couple’s resources can be depleted before the female spouse needs care – even though it is projected that she will need LTC for longer.
The likelihood of the need for LTC, and the costs associated with it, led to the report’s conclusion that it is prudent to plan for those costs earlier in life. Available financial planning tools include LTC insurance or insurance products with LTC or chronic illness riders.