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Dealing with rising care costs

Many people should include financing for living in a nursing home in their long-term plans, because 56 percent of Americans between the ages of 57 and 61 will reside in a nursing home during their lives. The rising costs of nursing homes necessitates long term planning.

Long-term care includes services that aid a person with daily living, such as eating, bathing and dressing. Health insurance, Medicare and disability insurance do not cover this. Medicaid covers some services if a person's income and assets do not exceed Michigan legal limits.

Long-term care insurance is a possible option. However, a person over 75 is generally ineligible for this coverage. Premiums also rise with a person's age, so it is advantageous to apply when a person is between 55 and 65. People should also consider that illnesses are now coming at an earlier age and that the average age of long-term care recipients was 66 last year.

Unique needs may determine coverage. For example, a family history of Alzheimer's Disease requires certain care. Or, a large family can provide informal care.

Costs are also an important consideration. The median cost of a private room in these facilities is $8,365 per month, while a semi-private room costs $7,441. An assisted living facility has a median cost of $4,000 each month, while the median monthly cost for home health aides is $4,195. The U.S. Department of Health and Human Services reported that the average woman requires 3.7 years of care and the average man needs 2.2 years of care.

The average annual cost of long-term care policies is $2,700. However, the price depends on the age of the person when the policy was purchased. Policies have different coverage time periods and the amount they pay each day. To avoid paying for coverage that will not be used, a hybrid policy may be purchased. These combine life insurance policies with long-term care insurance, so beneficiaries will receive higher benefits based upon unused coverage.

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