Long-term care
According to the U.S. Department of Health's Long-Term Care website (www.longtermcare.gov), there is a 70% likelihood that individuals over the age of 65 will require nursing care. However, being young doesn’t exempt you from this need; nearly 40% of people in long-term care facilities are under 65. Various factors such as strokes, heart attacks, cancer, car accidents, and sports injuries can necessitate long-term care for adults. One of the most significant concerns is the high cost of long-term care in the U.S., which can be overwhelming.
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The expenses associated with long-term care can be substantial. According to a report by the U.S. Department of Health, annual costs for care centers range from approximately $80,000 to $100,000 in states like Washington, California, and Florida, while cities like Boston, New York, and Washington, D.C. can see costs soar to between $100,000 and $250,000. Some individuals opt for in-home care, which can also be costly, averaging around $50,000 to $60,000 per year. Over just a few years, these expenses can erode a lifetime of savings and financial security.
Many people often wonder, “Doesn’t America have health insurance? Aren't the benefits good enough to cover long-term care?” Ironically, a significant number of individuals who declare bankruptcy due to overwhelming medical bills already have health insurance. A survey by the American Cancer Society reveals that more than 67% of medical expenses are actually indirect costs—like nursing care—that health insurance does not cover, forcing patients to pay these expenses out of pocket.
Long-term care insurance is primarily designed for individuals over 65 who have chronic illnesses or disabilities requiring extended care. This type of insurance typically covers services such as nursing home care, in-home assistance, and adult day care, including help with daily activities like dressing and bathing. Traditional long-term care insurance is a standalone policy that activates when the insured person can no longer perform at least two of the six essential activities of daily living, such as dressing, bathing, or eating, or if they experience severe cognitive impairment, such as dementia. Generally, this insurance becomes effective after a waiting period of 30 to 90 days. An alternative option is to combine long-term care insurance with life insurance, allowing policyholders to have both traditional coverage and long-term care benefits.
