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The True Costs of Long Term Care

The True Costs of Long Term Care
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“Honey, Are You Sure This Bill is Right?”

Old age is fifteen years older than I am.” – Oliver Wendell Holmes (retired in 1932 at age 90 as the oldest Supreme Court Justice)

In 2013, Americans spent over 120 billion dollars at long-term health care facilities, or an average of $6,900 per month for basic care in a semi-private room. If the patient qualifies for government insurances, Medicare and Medicaid can pay the majority, an average of 71%, but still leave a hefty balance. Most of the elderly do not have long-term care insurance. Even with government insurance in place an average of $2000 per month for basic care only is usually absorbed by family members as an “out-of-pocket expense,” out of personal savings, IRAs, and/or liquidating assets.

Cost of long term care

In addition, unless the patient needs no medical attention and their long-term housing contract is “all-inclusive,” expect a small boatload of extras as part of the invoice for “basic care.” Someone, perhaps yourself, is bound to ask, “Honey, Are You Sure this Bill is Right?”  

Viewer discretion is advised. Once these bills are out on the table, grand-kids planning on college should stand aside. Even with Medicare and Medicaid insurance in place, the unpaid 29% of the basic bill plus the extras… for personalized nursing care, doctor and hospital visits, treatments, surgeries, physical therapy, special diets, special needs, emergencies, and transportation can add up fast and deplete family resources.

According to AARP, most Americans do not plan for the non-stop sums required for long-term care at senior living facilities. Once the family has recovered from the first round of “basic-care-plus-extras” sticker shock, they could face bills at least twice those amounts. Statistically, the mental capabilities of more than half of all seniors living in LTCFs will decline from “Mild Cognitive Disorder” (MCI) to Dementia or Alzheimers. Dementia and Alzheimer´s patients require special “Memory Units” designed for patient safety and staffed for 24/7 personalized care. Costs and medical extras for patients in memory wards increase dramatically. Invoices like these are enough to make anyone wander off, or forget to open the mail.

What Covers Who, Who Covers What, and When?

Although Medicare is considered the first line of defense in health insurance, at least for seniors over 65, it covers only the first 100 days after hospitalization. In general, Medicare does not cover long-term care in nursing home or assisted living facilities. Government subsidies may be available in some states and under some circumstances, but amounts of coverage are limited and restrictive about kinds of coverage, where, and when it´s received. The realities of who covers what and what covers who can be surprising.

Ask Medicare is a government website that provides more comprehensive information for family caregivers, but can be difficult to navigate.  gives useful information and offers results of inspections at local long-term care facilities.

Long-term, a Dept. of Health and Human Services website, outlines the following basics and helps clear up many common misunderstandings.


  • Only pays for long-term care if you require skilled services or rehabilitative care:
    • In a nursing home for a maximum of 100 days, however, the average Medicare covered stay is much shorter (22 days).
    • At home if you are also receiving skilled home health or other skilled in-home services. Generally, long-term care services are provided only for a short period of time.
  • Does not pay for non-skilled assistance with Activities of Daily Living (ADL), which make up the majority of long-term care services
  • You will have to pay for long-term care services that are not covered by a public or private insurance program


  • Does pay for the largest share of long-term care services, but to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements
  • Such requirements are based on the amount of assistance you need with ADL
  • Other federal programs such as the Older Americans Act and the Department of Veterans Affairs pay for long-term care services, but only for specific populations and in certain circumstances

Health Insurance:

  • Most employer-sponsored or private health insurance, including health insurance plans, cover only the same kinds of limited services as Medicare
  • If they do cover long-term care, it is typically only for skilled, short-term, medically necessary care

GOOD TO KNOW: Like public programs, private sources of payment have their own rules, eligibility requirements, co-payments, and premiums for the services they cover.

Reverse Annuity Mortgages

Once a home owner´s mortgage is paid in full, as can be the case for many seniors, it often becomes a senior´s largest asset. Home owners can receive monthly payments from  lending institutions willing to slowly buy the home from them over a fixed period of time. The homeowner still owns the home while the financial institution makes monthly payments tailored to meet the monthly payments at a long-term care facility.

Long-term Care Insurance

The best way to ensure a wide range of choices in medical care and housing, either in independent living, assisted living facilities, nursing homes, or other housing options is to begin long-term care insurance by age 50. By age 85, providers no longer offer long-term care insurance. As with all insurance policies great care must be taken to read the small print, check the company´s record of payments and financial strength, and shop around for insurance providers. Is this policy tax deductible? Can premiums be deducted under “itemized medical expenses?”

Vital Statistics: According to the American Senior Housing Association (ASHA):

  •  The average length of stay in a nursing home: 21 months
  •  Independent Living: 38 months
  •  Assisted Living: 77 months
  •  Alzheimer’s Care: 17 months
  •  Of those currently residing in an assisted living community 34% will move to a skilled nursing facility due to deteriorating health and 30% will die.
  •  The mortality rate of individuals moving into a “skilled nursing facility” is 50%-60% within the first 12 months.
  •  The mortality rate is higher in the first 6 months at a “skilled nursing facility.”

A Green and Viable Option – “Intentional Communities”

Founded by Dr. Thomas and Steve McAlilly of Mississippi Methodist Senior Services in 2003 as a non-profit, the Green House Project  builds senior housing designed for small intentional communities. Prívate cottages with prívate rooms and baths provide a home-like and social atmosphere with an open schedule for food preparation. Communal meals are served in dining rooms.

From Wikipedia: “The Green House Project is an American national non-profit organization dedicated to creating alternative living environments to traditional nursing home care facilities. The project creates “caring homes for meaningful lives” for elders[1]where residents have private rooms and baths, can move freely through the home, build deep knowing relationships with each other more and even participate in preparing their own meals. It is based on a philosophy seeking to reverse the “enforced dependency” of life in a traditional nursing home by creating small intentional communities of 7-10 elders designed to foster late-life development and growth.[2]

“Residents of Green House Project homes have shown “increased reports of mobility and social interaction, and fewer reports of weight loss and depression” compared with those living in traditional nursing home facilities.[3]

“As of Dec 2013 there are 153 open Green House homes on 37 campuses in 25 states with another 120 in development

Categories:   Finance, Housing

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Burt Glenn

Burt Glenn

Burton Glenn is a former Biology and Chemistry Professor and world traveler. He studies and writes about the effects of aging on the body and mind, as well as his personal experiences transitioning into retirement.