Will You Really Need Long-Term Care? The Odds Are Higher Than You Might Think
An average healthy 65-year-old couple has a 75% chance that one partner will require significant long-term care in later life and a one-in-four-chance that both will need such care, according to a new report that aims to quantify one of the biggest wildcards in retirement planning.
Some people die without needing any care in older age, while others (dementia patients in particular) need assistance for years. For most older adults, the reality lies somewhere in the middle, according to the report by HealthView Services, a Danvers, Massachusetts-based company that provides health care cost data to financial advisors.
“One of the most important things is to know what the numbers are,” says Ron Mastrogiovanni, CEO of HealthView Services.
In other words, understand the likelihood that you’ll need care and how much it might cost. While home-based care has grown in popularity during the pandemic, families might not know that staying home can be a lot more expensive than relocating to a facility, Mastrogiovanni says. Twelve hours of home care a day roughly equates to the same cost as a nursing home, while 24/7 home care costs double what a bed in a facility costs.
How much does long-term care cost?
Costs for such care vary greatly by location. A 65-year-old man with no health conditions has a 44% chance of needing long-term care by his actuarial life expectancy of age 87, according to the report. That care is expected to last 660 days and cost $123,881 in today’s dollars, assuming national average costs across all states, the report projects.
A healthy 65-year-old woman living to an actuarial life expectancy of age 89 has a 56% probability of needing long-term care, the report found. Her average duration of care will be 992 days and projected costs will be $183,841 in today’s dollars.
Women live on average two to four years longer than men, so planning for heterosexual couples must take that into account. “Now, the widow is on her own, and she doesn’t have a spouse to care for her,” Mastrogiovanni says. Often, the husband needs care first, and without careful planning resources can get depleted on him before it’s the woman’s turn.
People might assume that since they’re healthy, they have a lower likelihood of needing care. In fact, the reverse is true, Mastrogiovanni says. The need for care correlates closely with age, and people with chronic conditions like diabetes and heart disease tend to die younger than those in good health. (That said, when people with chronic conditions do need assistance, they end up needing it for longer than healthy people, on average.)
| 65-Year-Old Female |
| LTC Probability | Length of Care Required | Life Expectancy | |
| Cardiovascular Disease | 61.2% | 946 days | 88 |
| No Conditions | 56.0% | 992 days | 89 |
| High Cholesterol | 48.4% | 1,000 days | 87 |
| Tobacco Use | 34.9% | 1,053 days | 84 |
| Type 2 Diabetes | 32.7% | 1,072 days | 81 |
| Source: HealthView Services |
| 65-Year-Old Male |
| LTC Probability | Length of Care Required | Life Expectancy | |
| Cardiovascular Disease | 45.1% | 630 days | 85 |
| No Conditions | 44.3% | 660 days | 87 |
| High Cholesterol | 37.1% | 663 days | 85 |
| Tobacco Use | 25.5% | 690 days | 82 |
| Type 2 Diabetes | 20.1% | 700 days | 78 |
| Source: HealthView Services |
How to pay for long-term care?
Medicare doesn’t cover routine long-term care. The federal health insurance program doesn’t pay for help with daily needs like bathing and dressing, regardless of the setting. So families are on their own, whether the care is provided in a nursing home, assisted living facility or at home. (Medicare will pay for shorter, rehabilitative stays in nursing homes, typically following surgery.) Medicaid, the health insurance program for low-income Americans run at the state level, pays for long-term care only for those who meet strict income and asset criteria.
Often, a combination approach can work when it comes to funding care needs, Mastrogiovanni says: for example, self funding plus an insurance product. (Money has an overview of popular long-term health insurance companies here.)
More from Money:
You'll Probably Have to Retire Earlier Than Planned, Research Finds. Here's How to Prepare
Long-Term Care Insurance: A Comprehensive Guide to Costs, Coverage, and Whether It's Right for You