An average healthy 65-year-old couple living to their
projected actuarial longevity has a 75% chance that one partner will require a
significant level of long-term care, according to research released Tuesday by
HealthView Services, a producer of health care cost-projection software.
There is a 25% probability that both partners will need
long-term care in a skilled nursing facility or an assisted living facility, or
that both will require at least 44 hours per week of skilled care at home.
HealthView Services researchers drew on the firm’s actuarial
data to highlight the projected LTC costs, the probability that care will be required
and duration of care, and the significant effect of age, gender, health
condition and location on these expenses.
The report also shows the cost of different types of care
and the importance of the amount of assistance that may be required when budgeting
for home health care at the end of life.
“COVID-19 has led to a new focus on long-term care and
driven a shift toward home health care as a preferred option,” HealthView
Services chief executive Ron Mastrogiovanni said in a statement.
“Although Americans may be more aware of long-term care as
an issue, most choose to roll the dice when it comes to these expenses.
Providing cost and probability of care data is a powerful starting point for
LTC planning discussions between advisors and clients.”
Gender Differences
The research shows a probability of 44% that an average
65-year-old man with no health conditions will need long-term care by his
actuarial life expectancy of age 87.
Assuming national average costs across all states and a
blended average of different types of LTC, the report says he can anticipate
spending $237,368 — $123,881 present value — for an expected 660 days of care,
about 22 months. This excludes Medicare premiums and co-pays.
A healthy 65-year-old woman living to an actuarial life
expectancy of age 89 has a 56% probability of needing long-term care.
Her average duration of care will be 992 days, about
two-and-a-half years, and the projected costs will be $373,712 — $183,841
present value — or 58% higher than for her partner, given the longer period of
care and higher annual costs driven by projected LTC inflation.
“LTC is a high-probability and high-cost event that needs to
be planned for,” Mastrogiovanni said. “Couples, whether heterosexual or
same-sex, need to develop a plan with a financial professional to ensure that
if one partner requires LTC, the surviving spouse’s needs can also be met.
“For women, who tend to live longer than men and are on
average 2.3 years younger than a male spouse, this is a particularly acute
issue.”
The report showed the effect of chronic health conditions on
LTC expectations for men and women. These included Type 2 diabetes, tobacco
use, high cholesterol and cardiovascular disease.
With the exception of heart disease, chronic conditions
reduce the probability of needing long-term care for both men and women, given
reduced longevity.
According to HealthView Services planning data, when those
with a chronic condition require care, on average they will need it at an
earlier age and for a longer period, compared with a healthy individual.
The report said that for an average 50-year-old couple,
costs will be significantly higher than for the 65-year-old couple, driven by
an extra 15 years of annual LTC cost inflation.
Assuming projected average longevity, an industry standard
of 44 hours of home health care per week, one chronic health condition and
residency in San Francisco, researchers said a 50-year-old man can expect to
spend an average of $368,421 — $128,755 present value — and his wife $486,520 —
$166,309 present value — for long-term care.
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