Life expectancy for baby boomers and advances in assisted care and medical technology allow for more individuals with chronic illnesses and disability considerations to live independently and longer lives.  The number of 65 and older population will double from about 25 million to 50 million by 2050, and the 85 and older population will more than triple. 1

At least 70% of people turning age 65 will require some type of LTSS during their lifetimes. 2 The older you are the more likely you will require some type long term services.  Even more significant is that women, with longer life expectancies, are more likely to need care and require it for a longer period of time2.  Chronic conditions such as heart disease, high blood pressure and diabetes, now with health care advances are likely to be treatable and lives extended for years if not decades.

Long -term services support (LTSS) can be provided in different settings, by different parties and organizations for various costs.  A licensed practitioner can design a plan of care requiring home, community or facility based services provided by a combination of family members, home health aides and skilled nursing professionals.  Homecare services can be unpaid, provided by a family member or friend or paid such as a Certified Nurse Assistant (CNA) or other professional.  Facility based services are provided at either assisted living facilities or skilled nursing homes.

There has been a trend under the “Quality of Life” movement within the LTSS community where individuals with financial means are able to stay in the assisted living facilities with enhanced amenities until death under most conditions, unless 24 hour skilled nursing is required.  Those without financial means or long term care planning may have to enter the traditional skilled nursing home environment earlier.

These costs can be covered through assets owned by an individual and spouse, family, State Medicare programs and/or insurance products that provide long term care benefits. With the average nursing home stay for an individual approaching $200,000, many individuals have implemented some form of long term care plan to help pay for these costs and to help protect their retirement assets from being depleted.

In the 2015 Cost of Care Survey for Tennessee, the median annual rate for home health aide services are $41,400 based upon a 40 hour week, assisted living facility median annual rate was $40,700, skilled nursing home semi private annual rate of $70,080, and nursing home private annual rate of $75,555.  The average stay in a nursing home is approximately 2.4 years while the average total LTSS claim (Home Care, Assisted Living and Skilled Nursing Care) is closer to four years.  Assisted living costs and skilled nursing costs are estimated to increase to $171,950 and $206,591 respectively by 2037. 3

As part of a comprehensive financial plan, these costs can be covered through assets owned by an individual and spouse, family, State Medicare programs and/or insurance products that provide long term care benefits. With the average nursing home stay for an individual approaching $200,000, many individuals have implemented some form of long term care plan to help pay for these costs and to help protect their retirement assets from being depleted.

The key to providing for long term services and support costs is planning.  As part of any comprehensive financial plan health care and long term service and support costs must be identified and addressed.

  1. Social Security/Medicare Long-Term Health Care Costs- 2015.
  2. U. S. Department of Health and Human Services-2016.
  3. Genworth Cost of Care Survey2015.

Jason Peeples is a registered representative of and offers Securities, Investment Advisory and Financial Planning Services through MML Investors Services, LLC, Member SIPC, 12 Cadillac Drive, Suite 440, Brentwood, TN  37027 (615) 309-6300.

Continuum Planning Partners is not an affiliate or subsidiary of MML Investors Services, LLC or its affiliated companies.  CRN201809-204751

 

Continuum Planning Partners Post Author
Jason Peeples, CFP®

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