Slightly more than half (63 percent) of respondents to Prudential’s latest long-term care survey say they’re confident about their ability to pay for long term care.
“There’s no question that as Baby Boomers age and approach retirement, one critical component to their financial plan – sometimes overlooked with dire consequences – is how to protect retirement savings, income, choice, and independence from the impact of a long-term illness or disability,” says Malcolm Cheung, vice president, Prudential Long-Term Care Insurance.
Prudential’s study points to a disturbing lack of knowledge regarding the cost and funding sources for long-term care services. On average, respondents estimated the average daily rate for a semi-private room in a nursing home at $450 – more than double the actual average of $215. And, more than one-third believe that a combination of private health insurance, Medicare, and Medicaid will cover any future extended care costs, while in reality, consumers can expect minimal coverage from all but Medicaid.
The cost of insurance to cover long-term care needs is equally misunderstood. While the cost of an individual policy varies significantly by age at time of purchase, 60 percent of those surveyed well overestimated the annual cost, even for the oldest of individuals. The remaining 40 percent were so unsure they couldn’t venture a guess.
According to Genworth's 2010 Cost of Care Survey, private care rooms with 24-hour assistance can be costly ($206 median daily), and at a successive rate of 5.1% per year, retirees can almost count on the cost to double in 20 years. In which case, they might want to move to a state like Louisiana, which posted the lowest annual median rate for a private room in a nursing home in 2010.
And the cost goes up from there.
Slideshow: Here are 5 states with the lowest costs for private room nursing care>
1. Louisiana
- *Nursing Home Median Annual Rate (Private Room): $51,056
- Nursing Home Median Annual Rate (Semi-private Room): $47,556
- Adult Day Health Care Median Annual Rate: $14,820
- Home Health Aide Services Median Annual Rate: $35,464
Next: Missouri
2. Missouri
- *Nursing Home Median Annual Rate (Private Room): $51,191
- Nursing Home Median Annual Rate (Semi-private Room): $47,815
- Adult Day Health Care Median Annual Rate: $18,252
- Home Health Aide Services Median Annual Rate: $41,184
Next: Oklahoma
3. Oklahoma
- *Nursing Home Median Annual Rate (Private Room): $52,104
- Nursing Home Median Annual Rate (Semi-private Room): $47,450
- Adult Day Health Care Median Annual Rate: $11,700
- Home Health Aide Services Median Annual Rate: $41,710
Next: Iowa
4. Iowa
- *Nursing Home Median Annual Rate (Private Room): $56,393
- Nursing Home Median Annual Rate (Semi-private Room): $52,195
- Adult Day Health Care Median Annual Rate: $13,169
- Home Health Aide Services Median Annual Rate: $46,858
Next: Arkansas
5. Arkansas
- *Nursing Home Median Annual Rate (Private Room): $56,575 tied with Kansas
- Nursing Home Median Annual Rate (Semi-private Room): $50,735
- Adult Day Health Care Median Annual Rate: $16,640
- Home Health Aide Services Median Annual Rate: $37,752
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