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The costs of long-term care services for 70-and-older Americans are expected to grow enormously over the next three decades, putting a heavy burden on individuals, government programs and nursing facilities, according to a recent report by professional services firm PricewaterhouseCoopers.
The current average lifetime cost of long-term care per person already has reached $172,000 (in 2016 dollars), according to the report entitled “Formal cost of long-term care services: How can society meet a growing need ?, ” based on a study of insurance claims. The estimate includes all paid services but not informal care.
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The growing elderly population and rising costs of care will mean that the total financial burden will double from $2.8 trillion to $5.6 trillion (in 2016 dollars) by 2047, the report says.
The report also estimates costs by state. The most expensive is Connecticut, where individuals relying on long-term care need an average of $244,000 to cover paid services. Massachusetts is second at $236,000.
Nebraska has the lowest per-person costs, at $130,000, and Arizona the second lowest, at $137,000, according to the report.
Medicare and Medicaid also face a growing burden. “If population demographics remain similar to what they are today, long-term care funding for these government programs will be increasingly costly to future generations,” the report says.
The report serves as a warning for all concerned and may prompt renewed interest in long-term care insurance options.
“The picture we paint in this report has several implications for financing of long-term care risks,” the authors wrote. “The average estimated cost is a significant sum, and long-term care financing should be a consideration in any personal retirement financial plan.”