If you were to suffer an illness or disability that required long-term nursing care, would you be covered?
Maybe not. The vast majority of Americans go through their lives reassuring themselves that it will never happen to them. However, if past trends continue, the estimated risk of a 65-year-old person needing some form of long-term care during their life is 70 percent and 20 percent will need it for longer than five years.1
That means it could very well happen to you. And while nursing home costs vary from area to area, the median cost of a one-year stay in a private room in a nursing home in 2020 is $105,850.2
Medicaid, the joint federal and state program that covers medical bills for the needy, pays a substantial portion of long-term-care costs but usually only for those who are impoverished.
And Medicare is not paying much of the cost of long-term care. That’s why the elderly should not rely on Medicare for their long-term-care needs.
Clearly, long-term-care costs pose a real problem for the elderly and their families. Long-term-care insurance can help preserve your accumulated wealth and provide coverage in the event you need long-term care. This can go far in helping to address financial need during retirement.
Sources: 1) Administration for Community Living, 2020; 2) Cost of Care Survey 2020, Genworth Financial, Inc. (most current information available)
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