According to the OPM, only 267,000 federal workers out of the 11-million eligible currently carry FLTCIP to cover the cost of Long Term Care (LTC) in a facility. Overall, only 3.3% of the U.S. population has purchased some type of LTC insurance. Considering the latest statistics far too many retirees may end up paying out of pocket to cover the high cost of LTC.
Will You Need LTC In The Future?
Though your need for LTC services varies depending on your health and longevity, the likelihood of requiring some type of long-term care increases as you approach age 65. Research conducted by “A Place For Mom” reveals the following:
- 70% of adults aged 65 years and older will require long-term care at some point.
- The average length of stay in long-term care facility is 3.2 years.
- Approximately 20% of facility residents require care for 5 years or longer.
- Americans spend $475.1 billion annually on long-term care.
- There are 67 women for every 33 men in long-term care facilities.
- Women in the U.S. have longer life expectancies than their male counterparts averaging 79.1 years old versus 73.2 years old, respectively.
Add to this, according to the U.S. Census Bureau, all Baby Boomers — currently estimated at over 70 million — will reach age 65 or older by the year 2030.
“Since the cost of LTC continues to rise every year, your out-of-pocket costs will likely be much higher 10 to 15 years into your retirement.”
Why LTC Isn’t Covered By Healthcare Insurance
Long-term care is assistance with day-to-day activities like dressing and bathing that you’re unable to do for yourself. This type of custodial care is provided in assisted living facilities and nursing homes, or by in-home health aides.
Unless you’ve purchased long-term care (LTC) insurance, you’ll likely pay for these services out of pocket. Why? Because FEHB and Medicare do not cover the cost of non-medical custodial care:
- The median cost nationwide of assisted living is $4,640 per month ($55,680 per year).
- The median cost nationwide of a private room at a nursing home is $9,034 per month ($7,908 per month for a shared room).
- The median cost nationwide of a home health aide is $27 per hour.
Since the cost of LTC continues to rise every year, your out-of-pocket costs will likely be much higher 10 to 15 years into your retirement.
LTC Insurance Protects Your Financial Security In Retirement
With FLTCIP premiums set to increase significantly in 2024 you may want to meet with an FRC® trained advisor who can help you compare private-sector LTC insurance products that can offer a better overall value.
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