Long-term care is expensive and, well, can last for a long time. There are a number of long-term options. In this article, I’ll discuss the expenses associated with long-term care.
As with many worrisome subjects, the best place to start is with definitions. When I use the phrase “long-term care,” I mean care that assists with the basic activities of daily living (for example, clothing, bathing, toileting, feeding) and with the instrumental activities of daily living (for example, cooking, medication administration). In most instances, a person who requires long-term care is “elderly,” which I will define as aged eighty or older, though some people who are disabled require long-term care.
There are different forms of long-term care—nursing homes, assisted living residences (“ALRs”), home health aides, and continuing care retirement communities (“CCRCs”). Each of these forms of care provide different services, in different settings.
A CCRC is said to provide age-in-place services. In other words, the resident can enter the CCRC and receive a wide array of long-term care services that permit the resident to remain at the one facility for the remainder of his life. For instance, Mr. Smith enters a CCRC in the independent living section. The independent living section provides an independent apartment for Mr. Smith, but the staff does door-checks on Mr. Smith every day to ensure that he is all right. The independent living section also offers congregate eating, and socialization with other residents who are Mr. Smith’s peers.
If Mr. Smith requires more assistance, the facility could provide a home health aide to come to Mr. Smith’s apartment several hours per week. If Mr. Smith requires still more assistance, he can move to the ALR or nursing home section of the CCRC, both of which are part of the same community.
Mr. Smith never has to leave the community unless he requires hospitalization. He can age-in-place at the same location.
CCRCs typically have an entrance fee. The fee may be anywhere from $100,000 to $400,000, and the fee may be partially or wholly refundable. CCRCs also chare a monthly fee, which can range anywhere from $2,500 (for independent living) to $14,000 (for nursing home). CCRCs are expensive and they are not for everyone.
Nursing homes are sub-acute care facilities. A nursing home is a step-down from a hospital, which is an acute care facility. Nursing homes have one or more nurses on staff at all times. The facility also will have a resident physician and numerous aides.
Nursing homes provide rehabilitative or rehab services and custodial (or long-term care) services. Oftentimes, when a person is discharged from a hospital, he is discharged to a nursing home for rehab. The rehab stay may last anywhere from a few days to a few weeks, but the rehab is short-term care. The Medicare program pays for rehabilitative services.
When a nursing home provides custodial care, this form of care is traditionally thought of as long-term care. Unlike rehab services, the Medicare program does not cover the costs of custodial care. There are three ways to pay for custodial care—private payment, private long-term care insurance, or Medicaid. Custodial care in a nursing home costs anywhere from $10,000 to $15,000 per month.
An assisted living residence is, in my opinion, similar to a hotel with home health aides. Sometimes, like a nursing home, ALRs have a nurse on staff. ALRs provide congregate meals and socialization with a resident’s peers. ALRs cost anywhere from $4,000 to $11,000 per month, depending on the level of assisted services a resident’s needs.
Many people prefer to stay in their home. A home health aide can help with the activities of daily living in the person’s home. If hired through an agency, an aide can cost $25 to $35 per hour. If hired “under-the-table,” an aide costs about $15 per hour.