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October 03, 2016 at 12:19 AM
There’s little dispute that the need for long-term care is on the rise with an aging population, according to Christine Benz, Morningstar’s director of personal finance.
In her latest commentary, Benz pulled together a number of statistics on long-term care from a variety of objective sources.
“The percentage of 65-year-olds who either spent at least one night in a nursing home or needed in-home healthcare over the previous two years jumped by 40% and 50%, respectively, between 2000 and 2010,” Benz wrote. “And the costs can be staggering—in expensive geographies, the annual outlay for care in a long-term care facility can exceed six figures.”
At the same time, Benz pointed out how long-term care insurance premiums have risen at a much higher rate than inflation. While prices on new long-term care policies weren’t uniformly higher in 2016 compared to 2015, the cost of a new policy has increased as much as 9% from one year to the next.
Culled from a number of sources, here are some of the statistics that Benz deems a “must-know.”
1. Who needs long-term care?
According to 2013 data from the Administraion for Community Living, 9% of adults over age 65 experience difficulty with self-care and 15% experience difficulty living independently.
The Center for Retirement Research at Boston College estimates 44% of men and 58% of women will need long-term care.
Alzheimer’s disease is one of the leading causes of needing long-term care. According to the Alzheimer’s Association, 11% of the population age 65 and older has Alzheimer’s disease, which is about 5.4 million of Americans in 2016. The Alzheimer’s Association predicts 13.8 million Americans will have Alzheimer’s disease by 2050, barring the development of a medical breakthrough.
2. The duration of nursing home stays isn’t as long as you might think.
The average length of stay in a nursing home is less than a year for men and roughly 1.4 years for women, according to a report by the Center for Retirement Research at Boston College. The probability of needing more than one year in a nursing home for men is 22% and 36% for women, the same report finds. And the probability of needing more than five years in a nursing home is 2% for men and 7% for women.
3. Cost of care.
The median annual nursing-home cost in 2016 is $82,125 for a semi-private room and $92,378 for a private room, according to the Genworth Cost of Care Survey. The five-year annual inflation rate in nursing-home costs for a private room is a staggering 3.5%.
