Long-Term Care
CAP Affiliated Insurance Services
February 2000
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Long-term care may pose one of the biggest threats to your financial security. We continue to provide you with pointed information about long-term care: What it is, who is at risk, and the options and costs to protect yourself. We welcome your questions and comments.

WHO NEEDS LONG-TERM CARE? WHAT WILL IT COST WHEN IT IS NEEDED?

Current statistics indicate that long-term care issues will, in some way or another, affect most of us. This may be as a “user” of long-term care by being financially involved through the payment of care for a loved one, or in the role of a caregiver. With our membership at an average age of 50 years, there is a greater need for awareness of the costs involved and the options available to you.

The Issues

• In 2020, the population over age 65 will have grown from 33,000,000 to 55,000,000. It will double by the year 2030.
  
• At age 65, the probability of needing long-term care is 50%.
  
• Of those, 43% will spend some time in a nursing home.
  
• Of those, 55% will stay at least a year with 21% staying at least 5 years.
  
• Average stay in a nursing home is 2 ½ years.
  
• 40% of Americans under age 65 will require long-term care.
  
• A recent study showed that 70% of all individuals entering a nursing home would deplete their assets and savings in just one year of care.
  

The Costs

• The average cost today of a nursing home in California is $50,000 a year.
  
• Cost of an average stay today is $125,000; it will be $331,744 in 20 years and $540,372 in 30 years (assumes 5% increase compounded annually).
  
• Staying in your home is not cheap either. Charges range from $50 to $60 a visit for visiting nurse; $110 per 8-hour shift for a home health aid or a homemaker.
  
• An Adult Day Care facility runs about $17,500 per year and between $20,000 and $40,000 in an Assisted Living facility, depending on amenities and location.
  

With costs like these, the questions become “How do I pay if I need care?” And, “How do I maintain my freedom of choice over the care I need?”

The next issue will deal with what Medicare and Medicaid will provide.

Please refer any questions or comments to:

Robert J. Molinaro, CAP Affiliated Insurance Services
(213) 473-8655 or e-mail rmolinaro@cap-mpt.com

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