U.S. News and World Report

Retirement healthcare costs get regular attention as the biggest unknown expense most of us will face as we age. Yet at least one of those costs—long-term care—stems from a situation that is statistically well-known. About 70 percent of people now age 65 and older will need some period of extended care during the remainder of their life. Further, according to a recent study, people who think they may need long-term care at some point turn out to be pretty reliable forecasters of their own futures.

1. Medicare provides limited benefits of up to 100 days, but only in a skilled nursing facility and only after a hospital stay. Surveys have shown consumers believe Medicare provides generous long-term care support, but it does not.

2. Medicaid will fund care for low-income people who have few financial resources, which describes virtually everyone after they’ve spent time in a nursing home. “Nearly half of the seniors who live for more than six months in nursing homes surrender almost all of their income and assets,” the EBRI study says.

3. Private long-term care insurance. There has been a sustained rise in nursing home residents covered by this insurance—to 14 percent in 2010 from about 6 percent in 2000. But policies can be expensive. A 2009 study found annual premiums for a typical policy averaged $2,800 a year for policies purchased when the owner was 55, $4,500 at age 65, and $9,600 at age 75. Since this study, some insurers have left the long-term care market and premiums have risen.

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