The Price of Aging

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By Dayana Yochim
May 1, 2002

As if the myriad of costs associated with aging -- retirement housing, greens fees, spoiling the grandkids -- weren't overwhelming enough, a new study by the AARP reveals that most aging Americans are unaware of how much they'll need to shell out for long-term care.

According to the aptly named study, "The Costs of Long-Term Care: Public Perceptions Versus Reality," the majority of 45+-year-olds surveyed underestimate the costs and funding sources of long-term care, which includes nursing homes, assisted-living residences, and in-home care provided by skilled nurses and aides.

The basic gist of AARP's discoveries:

Only 15% of those surveyed could identify the cost of nursing-home care within � 20% of the national average cost. More than half (51%) estimated the cost too low. (The national average monthly cost of nursing-home care is $4,654.)

Only one in four could come within � 20% of the estimated median cost of care in an assisted-living facility, and 38% said they did not know. (The national estimated median cost for assisted living per month is between $2,000 and $2,500.)

One in three had absolutely no idea how much an in-home visit from a skilled nurse or aide costs. (FYI: The average Medicare reimbursement is $109 for a skilled-nurse visit and $64 for a home visit by an aide.)

About 3 in 10 of those surveyed said they have insurance that covers the costs of long-term care. Yet the Health Insurance Association of America estimates that only about 6% of Americans purchased such insurance, meaning that folks may be confusing long-term care insurance with other types of coverage, such as disability insurance or Medicare.

Approximately 7 million Americans age 65 or older will need long-term care this year, a number that will nearly double to 12 million by 2020, according to AARP.

Don't be caught facing unexpected bills in your golden years. Get to know the costs, funding sources, and coverage options of long-term care in our insurance area, where we show you how to compare policies. For help figuring out all the costs of your dream retirement, enroll in the upcoming Rule Your Retirement Online Seminar.