I admit that I know very little about the costs of assisted living, nursing homes, and other elder care expenses. So far I’ve been fortunate to have parents that are independent. However, listening to the ongoing sagas they are experiencing with my grandmother is enough to make my head spin and my assets run into the nearest closet and lock the door. It begs the question – how the heck can anyone afford to pay for these long term care expenses?

I regularly hear them speak of monthly expenses for her care to the tune of $5,000, $6,000, $7,000 and up-up-up for various levels of assisted and nursing care. Of course this doesn’t include medical trips, medications, and the like. It most definitely doesn’t account for the untold amount of time they spend managing this mess and attempting to care for my grandmother in a loving way given that she has lost most of her faculties to alzheimers. While I am no help to them several hours away that doesn’t mean I don’t think about it and wonder how are people expected to manage the whole realm of elder care?

I often write about building wealth and creating a financial future you desire. When I think of these long term care scenarios I wonder if it is all for nothing. You can burn through hundreds of thousands of dollars in a short amount of time. How long would it take to wipe through every asset you had if you or your partner needed long term care?

Suzanne Wolfson at the gilbertGuide shares these sobering facts:

In 2007, the annual cost of long-term care in the US averaged $77,000. While many people are woefully unprepared to handle these high costs, many others have serious misconceptions about the real costs of long-term care and how much they will have to pay. Consider these surprising facts:

* Medicare only covers 8% of assisted living and in-home care costs. Medicare, Medicare Part D and Medicare supplemental plans will only cover short-term and medically required costs.
* The average cost of nursing home care is approximately $300 per day.
* In 2007, in-home care costs increased by 12%.

If you grab your calculator and take that $300/day figure and start multiplying I guarantee you that you’ll need to sit down and grab a pint of Ben & Jerry’s or stiff drink to even fathom them.

Of course if you have a nontraditional family your challenges for care escalate. Forget the fact that you can be denied the dignity of making health care decisions for your partner. Caring for elder parents can be an even bigger burden because insurance companies and the government don’t recognize your family. Momocrats shares in “The cost of caring for aging parents: another issue to consider for same sex unions”:

Because same sex partners aren’t recognized legally, insurers and companies aren’t required to provide benefits. For couples with adequate resources, they can care for aging parents on their own dime. For couples who don’t have that, they may have to abandon aging parents who need assisted living and medical care to state welfare.

“It took 1/3 of my salary to pay medical bills and nursing care for Barry’s parents. That should have been covered under my employer’s health insurance – except that we weren’t recognized,” Caleb said.

Just these two examples clearly illustrate that when it comes to long term care we are talking big bucks. Many people think they can rely on Medicare, but as Myrna Arroyo points out in “Planning for Long Term Care”:

Medicare – Don’t Count on It for Long-Term Care
Many seniors think that Medicare will pay for LTC if they need it. That is simply not true. Medicare coverage is limited to: qualified medical expenses (80% of an approved amount for doctors, surgical services, etc.); hospitalization for 90 days per benefit period with a total deductible of $1,024.00 for the first 60 days and a co-payment of $256.00 per day for the remaining 30 days, and an additional one-time, lifetime benefit of 60 days of hospitalization, with a co-payment of $512.00 per day (for a maximum of 150 days).

Medicare only pays for a limited period of “skilled” nursing home care that begins within 30 days following a hospital stay of at least 3 days. The maximum period is 100 days per benefit period.

If that baffles you, just wait… you can always purchase long term care insurance. That is another wild and wacky world of insurance (which can often feel like a four letter word). My impression of it has always been that it is very expensive and may or may not cover what you really need when you need it. Oh, wait a minute, that is my impression of all types of insurance! All sarcasm and personal opinion aside, what do you need to consider? Here are some of the “Hard Facts of Long Term Care Insurance” as presented by guest writer Laurie Flynn at Queercents:

Who is a suitable candidate for long-term care insurance? Single people with no one to look after them in case of a debilitating accident or illness should consider taking out a long-term care policy. Since they tend to live longer than men, women are also ideal candidates for this insurance coverage. Finally, anyone who wants to protect a bourgeoning nest egg should contemplate it. Long-term care costs can wreak havoc on your finances.

Is it costly? It varies, depending on the type of policy; how old you are when you apply and your health. Typically, most policies may range from $3,000 to about $7,000 a year. Couples typically receive some type of discount.

What does it cover? Depending on the contract, a typical long-term insurance policy covers any nursing home or institutional setting semi-skilled, adult daycare and managed care all the way up to condo-type healthcare homes. It also covers in-home healthcare, both by professionals and family members. Of course, the higher your premium, the more long-term care you will be able to afford.

What doesn’t it cover? Long-term care insurance is not medical insurance. It does not cover hospital stays nor will it cover any medical payments. Long-term care policies also typically do not cover acupuncture, heavy-dose vitamin therapy.

This is certainly one area that I still struggle to wrap my head around. To buy long term care insurance or not? I know my family has always been vehemently against it, yet it pains me to see them draining money like a seive daily. Certainly not a popular topic, but one that is worth taking into consideration at any age because at some point most people are affected in some way by this circumstance whether it be loved ones or yourself.

Paula Gregorowicz, owner of The Paula G. Company, works with women who are ready to create their lives and businesses the way the want rather than how they were told they “should”. Ready to learn how to achieve success on your own terms? Download the free 12 part eCourse “How to Be Comfortable in Your Own Skin” at her website http://www.thepaulagcompany.com.