Many People Unaware of Costs of Extended Care
Most U.S. residents underestimate the cost of extended care and are unaware of what expenses are covered by Medicare and private long-term care insurance, according to a study released Wednesday by AARP, the St. Petersburg Times reports.
AARP surveyed 1,456 people age 45 and older and found that one in 12 respondents came within 20% of estimating the cost of extended care.
Most underestimated the cost, with some respondents guessing that such care would cost $500 or $1,000 per month. Nursing homes in the U.S. charge an average $6,266 per month, or $75,000 per year, according to the Times.
A majority of people surveyed said they felt financially prepared if they ever needed extended care, and almost one-third believed they had purchased long-term care insurance through work or a private policy.
AARP spokesperson Steve Hahn noted that less than 10% of people age 55 and older have true long-term care insurance, according to industry estimates. Many people also believe that Medicare or Medicare supplemental policies will defray most of the costs of long-term care, the Times reports.
However, Medicare only covers "skilled" nursing care such as physical therapy for short periods of time, but it does not cover "custodial" care, such as help with eating or bathing (Nohlgren, St. Petersburg Times, 12/14).
The survey is available online. Note: You will need Adobe Acrobat Reader to view the report.