Long term care refers to the treatment a person needs for a long debilitating illness, a significant disability or other disorders limiting their ability to care for themselves. Long term care includes skilled nursing care, rehabilitation, hospice, respite, adult day care, residential and assisted living as well as home care. The need for this level of care is increasing. One national study reported that 70% of people reaching the age of 65 are expected to need some form of long term care.
Understanding what long term care includes is essential as there are several different circumstances when long term care is needed. A family member may need help with what is called activities of daily living (ADL) which includes walking, toileting, transferring, bathing, dressing, and eating. In another situation, an individual may require 24-hour care for severe physical illness, disability or Alzheimer’s. Finally, for those who need help with instrumental activities of daily living (IADL) such as cooking, cleaning, laundry or bill paying, another level of long-term care support is needed.
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The costs for any level of long term care are substantial and on the rise. For example, there has been a 67% increase in assisted living facility costs since 2004 according to a study done by Genworth Financial. Genworth Financial also identifies New Jersey as being in the top 3 states for the highest rates for assisted living facilities with monthly costs averaging $6065 per month or more.
In another study by Genworth Financial, the five-year costs of having a home health aide are now $274,560, for an assisted living facility, $363,900, and nursing home care, $711,750 in New Jersey. While the facility cost has continued to grow steadily, the increase in home health care is unexpected. Genworth has identified several factors for the rise in cost within the home health care industry including low unemployment, wage pressures, regulatory changes, sicker patients and employee retention.
With the cost of care increasing, funding for long term care is changing as well. The Health Care Association of New Jersey, which represents long term care providers in New Jersey reports 40% of funds for residential health care facilities come from Medicare or Medicaid, 50% come from private funds with the remaining 10% relying on other ways to pay.
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In a study funded by Fidelity Investments, new data shows that a 65-year-old couple will spend a minimum of $85,000 in long term care over their lifetimes. The need for long term care will continue to grow. In the next thirty years, it is anticipated that one-fifth of the population will be over the age of 65 with 8.4% in long term care facilities. Knowing the cost of long term care and planning for the high cost of such care have become priorities for older Americans.
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