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Understanding the Ever-Growing Costs of Long-Term Care

Understanding the Ever-Growing Costs of Long-Term Care

There are few life expenses that are rising as briskly as the cost associated with health care. Of all health care costs, long-term care (LTC) cost seems to be rising the fastest. For example, the average increase in cost associated with a U.S. nursing home bed has risen about 4.5% per year over the last five years. The median cost of a nursing home bed has increased 5.1% just from 2009 to 2010. Many wonder why LTC costs are rising so rapidly and if there’s any hope for it to level off in the future.

Why LTC Cost Is Rising

A large portion of the general population is aging and aging longer. The average life expectancy has steadily increased over the last three or four decades because of advancements to the sophistication and scope of medical care and treatment. Medical advancement doesn’t come without cost, and as the population ages, advancement costs in the field of medicine are passed along to patients. Another point is that increased life expectancy typically results in an increased duration and level of custodial care for the aged person.

Some research has shown that 80% of lifetime medical expenditures are used during the last 20 years of life.

Medical conditions, diseases, and illnesses that once ended in certain death are now treatable and manageable, but often leave the patient requiring advanced or long-term medical care. For example, advancements in stroke care have resulted in a higher probability of survival, but a stroke is now one of the leading causes of disability in the United States. A stroke patient may need custodial care to help or perform activities of daily living such as bathing, dressing, eating, grooming, and transferring from one position to another. Even after physical, occupational, and speech therapy, many stoke patients still require semi-skilled to unskilled care to accomplish daily activities.

Another aspect of LTC cost comes from the salary expectations of LTC workers rising faster than inflation. The education and skill level for health care workers has congruently increased alongside the advancements in medical technology and the health care field as a whole. Jobs, like a nursing home aide, that were once only considered a stepping stone to a different medical career path are now a permanent career choice and being monetarily compensated accordingly.

The bottom line is that demographics can’t be changed. Therefore, LTC costs will definitively continue to rise.

The Future of LTC Costs

After understanding why LTC costs are rising and will continue to rise, the next question for most is if there’s anything that can be done to manage the cost of LTC?

First of all, custodial care should be delivered in the most cost-effective environment available. Some tips would include preventative health care and taking good care of oneself during active years, which can postpone and reduce the future need for LTC services; opting for home health care or an assisted living facility vs. a nursing home; and caregivers utilizing adult day care centers for aged parents or grandparents, which still allows the caregiver to work during the day and care for their loved one at night.

Secondly, consider LTC insurance to help manage future LTC expenses and monetary burdens. A LTC insurance policy can be one of the best and most viable solutions to contain LTC cost on an individual level. Most comprehensive LTC insurance policies will generally cover home care, adult daycare, hospice, respite care, assisted living, and so forth that isn’t covered under Medicaid, Medicare, or a private health insurance policy. With LTC insurance, future LTC out-of-pocket expenses are in a manageable range for the policy holder.