The U.S. Department of Health and Human Services says about 57% of Americans need long-term care at some point
Most families seriously underestimate the potential cost of long-term care and don't know they will have to pay a lot of money for it
The total cost of long-term care can be large, extending by $100,000
Long-term care costs can be large, extending by more than $100,000, but experts told CNBC that most families are not ready to handle the fee.
"People don't plan ahead," Carolyn McClanahan, a certified financial planner, told the network. "It's a huge problem."
The 2022 report by the U.S. Department of Health and Human Services and the City College says 57% of Americans over the age of 65 will develop a serious disability that requires long-term care. The average cost of this long-term care is $122,400, the report said.
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On average, families will pay 37% of the total cost of this long-term care from the bag, while the rest is covered by insurance and public plans.
“It’s obvious that (workers) save in retirement, checking or savings accounts and that most people don’t have long-term care insurance,” Strategy at the Employee Welfare Institute Bridget Beaton Tell CNBC. "Where does that money come from?"
The cost of long-term care varies greatly depending on where you live. However, the data collected by Genworth and Carescout put the national average of $6,483 per month for Home Health Assistant and $5,900 in assisted living facilities.
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Still, many people have severely underestimated how much long-term care may cost. A recent employee welfare institute report found that “a large proportion of future caregivers do not estimate LTC costs” and those who expect they will remain under $50,000. Additionally, the report found that 43% of future care workers expect Medicare to pay for long-term care, while 29% of Medicaid expect Medicaid to pay.
Experts told CNBC that such estimates are unrealistic. They say health insurance generally does not cover long-term care services, while health insurance covers only certain aspects.
McClanahan told CNBC that health insurance usually covers up to 100 days of skilled care, which covers things like rehabilitation or medical management, but does not cover the managed care required for daily activities such as bathing and dressings.
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As for Medicaid, the largest long-term care payer, not everyone is eligible. Most people who are eligible for these benefits come from low-income families. “You basically have to be poor” to start.
“The challenge of long-term care costs is that they are unpredictable,” McLanerhan told CNBC. “You don’t always know when you get sick and need care.”
She advises Xers and millennials to start planning potential long-term care needs now. “When you think about it in advance, it will make decisions smoother,” she said.
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This article “This is a huge problem”, and experts urge Xers and Millennials to plan for long-term care initially appearing on Benzinga.com.
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