Boomers: Consider Long-Term Care Costs Now

The cost of an extended stay in an assisted living facility or skilled care nursing home can be devastating. And it’s time for baby boomers – individuals born between 1946 and 1964 – to consider this.

According to statistics, a stay in a skilled nursing facility can cost in excess of $90,000 per year for a private room. That’s enough to overwhelm most pensions and devastate many nest eggs. Furthermore, the chance of experiencing a long-term care event at some point is one in seven, according to the Public Policy Institute at Georgetown University.

Medicare does not pay significant long-term care benefits. Medicaid does help with limited nursing home care, but only after you spend yourself down to the poverty level. Specific rules vary by state.

What is long-term care insurance?

Long-term care insurance generally pays the cost of needed services for anything from home health care to advanced skilled nursing and hospice care plus everything in between, depending on the specifics in the policy.

Benefits become payable when the insured loses the ability to perform two or three activities of daily living, such as eating, dressing and other basics.

Generally, long-term care policies cover up to a certain daily amount. For example, you can buy a policy that pays up to $200 or $250 per day in benefits for up to five years.

Why you need it

Long-term care insurance can help protect a spouse from financial problems caused by long-term care events and eliminate the possibility of having to sell the family home or risk foreclosure in order to pay the costs of long-term care. Benefits may also enable family members to stay in the workforce rather than provide day-to-day care for a family member in need.

So, long-term care insurance helps protect family members’ incomes as well as the insured’s income and assets.