50 Must-Know Statistics About Long-Term Care
The skinny on usage, cost, insurance, caregivers, and more.
Note: This article is part of Morningstar.com's September 2016 Retirement Matters Week special report.
When I speak to pre-retirees and retirees, long-term care isn't central to the discussion. But even an offhand remark about the topic invariably sets off a firestorm of questions and comments: While some audience members have decided to purchase the insurance and others have decided to forego it, many others are on the fence, put off by the costs but terrified of the prospect of having long-term care expenses decimate their investment portfolios.
There's little dispute that the need for long-term care is on the rise with an aging population: 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. And the costs can be staggering--in expensive geographies, the annual outlay for care in a long-term-care facility can exceed six figures.
But while the likelihood that an older adult will need some type of long-term care is increasing, recent data show that the average length of stay is shorter than previous research had indicated--less than a year for men and roughly 1.4 years for women.
At the same time, long-term care insurance premiums have risen at a much higher rate than inflation. True, prices on new long-term care policies weren't uniformly higher in 2016 versus 2015 (new policies for women went up in price, whereas new policies for men went down), according to the American Association for Long-Term Care Insurance. In previous years, however, the cost of a new policy has increased as much as 9% from one year to the next. Existing policyholders have also had to contend with staggering premium hikes (or accept cutbacks in coverage). Many insurers have gotten out of the long-term-care business altogether, as declining interest rates, ultralow lapse rates, and higher-than-expected claims have curbed the profitability of long-term care policies.
Ultimately, the decision about whether to purchase long-term care insurance is a highly personal one, dependent on an individual's or couple's asset level and desire to leave a bequest, health history, and the peace of mind derived from having the coverage, among other factors.
To help aid in your decision-making, I've culled a number of statistics on long-term care: usage, costs, caregivers, insurance, and the role of government programs in paying for long-term care. Each statistic includes a link to its source material, and all of the facts and figures are based on U.S. data. I aimed to use the most current information possible, taken from objective sources. (A healthy dose of skepticism is helpful when researching long-term care; the insurance industry produces a lot of data geared toward spooking everyone into buying a policy.)
15%: Percentage of adults over age 65 who experience difficulty living independently, 2013.
44%: Percentage of men who will need long-term care.
58%: Percentage of women who will need long-term care.
0.88 years: Average duration of nursing-home stay for men.
1.44 years: Average duration of nursing-home stay for women.
22%: Probability of needing more than one year in a nursing home, men.
7%: Probability of needing more than five years in a nursing home, women.
11%: Percentage of the population age 65 and older that has Alzheimer's disease.
5.4 million: Number of Americans who have Alzheimer's diseases, 2016.
13.8 million: Projected number of Americans who will have Alzheimer's disease by 2050, barring the development of a medical breakthrough.
$43,539: Median annual cost for assisted-living facility, 2016.
$82,125: Median annual nursing-home cost, semiprivate room, 2016.
$164,250: Average annual nursing-home cost, private room, Manhattan, 2016.
$63,875: Average annual nursing-home cost, private room, Monroe, Louisiana, 2016.
3.5%: Five-year annual inflation rate in nursing-home costs, private room, 2016.
22%: Percentage of long-term care costs that are paid out of pocket, 2013.
13.2%: Percentage of people who receive professional home healthcare who have long-term care insurance coverage, 2010.
$5,518: Median total household wealth for people who have lived in a nursing home for six months or more.
$0: Median housing wealth for people who have lived in a nursing home for six years or more.
65%: The percentage of older adults with long-term care needs who rely exclusively on friends and family members to provide that assistance.
$470 billion: Estimated value of care delivered by unpaid caregivers, 2015.
60%: Percentage of caregivers who are women.
49: Average caregiver age.
70%: The percentage of caregivers who suffered work-related difficulties due to their caregiving duties.
$15,000: The average amount of income that caregivers will lose due to time demands of providing care to those with Alzheimer's or other dementias.
State and Federal Funding
51%: Percentage of long-term care services that are paid by Medicaid.
28%: Percentage of Medicaid funding that went to pay long-term care costs in 2013.
29.5%: Percentage of nursing-home entrants who were covered by Medicaid upon entry, 2010.
47.2%: Percentage of people who spent more than six months in a nursing home who were covered by Medicaid, 2010.
$119,220: Maximum amount of assets that a healthy spouse can retain for the other spouse to be eligible for long-term care benefits provided by Medicaid, 2016. (Actual amounts vary by state.)
100: Days of care in a skilled nursing facility ("rehab") covered in full or in part by Medicare following a qualifying hospital stay.
8%: Percentage of all long-term care delivered in the U.S. that is covered by long-term insurance.
13%: Percentage of single individuals over 65 with long-term care insurance, 2014.
$8.15 billion: Amount of long-term care claims paid out in 2015.
19.6%: Increase in short-term care insurance sales in 2015 relative to 2014. (Short-term care insurance policies cover periods of one year or less.)
17%: Percentage of applicants ages 50-59 denied long-term care coverage due to health issues.
45%: Percentage of applicants ages 70-79 denied long-term care insurance due to health issues.
$3,560: Annual premium for a "best-quality" long-term care policy for a married couple, both age 60, 2016.
$2,035: Annual premium for a "best-quality" long-term care policy for a single man, age 55, 2016.
$2,580: Annual premium for a "best-quality" long-term care policy for a single woman, age 55, 2016.
-1.9%: Decrease in initial premium amount for a "best-quality" long-term care policy for a single man, age 55, between 2015 and 2016.
7%: Increase in initial premium amount for a "best-quality" long-term care policy for a single woman, age 55, between 2015 and 2016.