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Nursing Home Costs Top $80,000 A Year

Wednesday, April 17, 2013 - 10:20 AM
From CNN Money: 

Over the past five years, the median annual cost of private nursing home care has jumped 24% from $67,527 to $83,950, according to Genworth's 2013 Cost of Care Survey, based on data from nearly 15,000 long-term care providers. From 2012 to 2013 alone, the price climbed 4%.

... A less expensive alternative to nursing homes are assisted living facilities because they don't offer the same level of care, but these are also seeing significant price increases from year-to-year. The median annual cost of care in an assisted living facility is $41,400, up nearly 5% from last year and 23% higher than five years ago, Genworth found.

Read more

One more thing to keep in mind when planning for retirement. 
7
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
1. Wednesday, April 17, 2013 - 12:18 PM
Not good news at all.

My long term care policy, which I took-out in September 2004, currently pays a daily benefit of $147.75 which increases at an annual rate of 5% due to the inclusion of an inflation rider in the policy. Hopefully my pension and Social Security benefits together with what financial assets I have remaining, after one Benjamin Bernanke gets done raking me over the coals, will provide for the remaining cost of care.
2
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,657
2. Wednesday, April 17, 2013 - 3:06 PM
Shorebreak, I congratulate you on your foresight in acquiring LTC coverage.  I have not done the same yet but continue to evaluate, although am close to reaching a point where the cost of the insurance may become financially prohibitive.   My reservations are first, looking at a tentative 15-20 year horizon, whether the companies offering the insurance will be viable - and the benefits which have been paid for available when needed.  Of course AM Best and other ratings help in this, but the extended horizon is what makes me hesitate to pull the trigger.   Second, I don’t understand ACA well enough yet to hazard a guess as to how that will change the landscape (although if I had to guess, the answer is probably “not in a good way”).  If you have insight to share regarding the process you used to select and vet an insurer, that would be very  appreciated. 

I should have mentioned in my original post that the photograph in the article is mismatched to the topic - the environment portrayed is most likely an Independent Living / Continuing Care facility.  It might even be an AL (Assisted Living) environment, but it is absolutely not a Skilled Nursing Facility ("Nursing home").

The article covers the financial costs of care in ALs and SNFs but it doesn't mention that even in the finest facilities, it is to your advantage to have someone - ideally a family member - advocate for you, even in an ALF, but it is especially important if you are in an SNF.  The work that the aides do is especially tough in that environment, both physically and emotionally.  There is also high turnover of personnel due to both the low pay and the high degree of responsibility demanded, and the facilities try to do the most with the least amount of staff. 

My recommendation, based on personal experience in caring for all the seniors in my family over the last 20 years, is to do one's best to stay healthy, and to stay at home for as long as possible, with home-health assistance if necessary.  If a move to an AL or SNF is needed due to worsening health / deteriorating capabilities, find someone who is emotionally and physically ready and willing to be an interested and active participant in your healthcare.  You will get significantly better care if you have someone willing to – at minimum - handle mountains of paperwork, to visit on an irregular schedule of both days and times, to ask questions and escalate issues as/if needed, to participate in ISP (Individual Service Plan) reviews and follow up on the discussions and commitments made.   Most of all, the advocate needs to keep their eyes and ears open and be ready and willing to follow up and act on anything which appears to be out of line. 
7
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
3. Wednesday, April 17, 2013 - 4:53 PM
Re: pearlbrown @ 2. Wednesday, April 17, 2013 - 3:06 PM

"If you have insight to share regarding the process you used to select and vet an insurer, that would be very  appreciated."

It was unintentional that I was introduced to the concept of LTC insurance. My insurance agent sponsored a free dinner to listen through a sales pitch regarding the subject of the looming costs of LTC. After listening through the whole thing and enjoying my free steak dinner I proceeded to investigate the different policy options and companies offering them. Here is something to start with:

Top LTC Companies Financial Strength Rating and Size Category

Sales Rankings for LTCI Review Best Long Term Care Insurance Companies
  • Mutual of Omaha: 26.61%, sales for the week trending +
  • Genworth: 25.33%, sales for the week trending -
  • Mass Mutual: 11.83%, sales for the week trending +
  • John Hancock: 12.58%, sales for the week trending +
  • Transamerica: 12.34%, sales for the week trending -
  • United of Omaha: 6.42%, sales for the week trending +
  • Lincoln Financial: 1.89%, sales for the week trending -
The average age people buy Long Term Care Insurance is 59.1 years of age. However, the average age a person needs to use their policy is around 84 years old. With that said, you may buy one of the top ten Long Term Care Insurance companies and not use it for 20 to 30 years in the future. That is why is important to examine the company's financial ratings to make sure that the company you choose will be there to pay your claim when you need care years down the road. The below links are third party companies that rate the financial strength of the Long Term Care Insurance company.
  • A.M. Best's Insurance Reports
  • Standard and Poor's
  • Moody's
http://longtermcareinsurancereviews.com/
 
8
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,657
4. Wednesday, April 17, 2013 - 6:13 PM
Shorebreak, thanks for the info and the link to the website.  

The 20-30 year horizon before needing benefits (on average) and the probability of a changing environment (political, regulatory, or economic) over that time affecting the viability of the LTC company is, as I mentioned, what gives me pause.   However, I will definitely continue to examine this - and if my queries prompt steak dinner invitations, then all the better ;)
5
pearlbrownpearlbrown1,356 posts since
Nov 2, 2010
Rep Points: 5,955
5. Wednesday, February 26, 2014 - 7:10 AM
The cost of long term care facilities such as nursing homes and assisted living facilities will continue to rise. Without coverage, people with long term care needs will surely find it hard to pay for their expenses. The price hike of 4% is a lot to take, so it is imperative to purchase long term care insurance. This is still more affordable when compared to paying out-of-the-pocket. A private insurance can cost you about $1,000 to $7,000 annually and a year of stay in a nursing home will cost you $80,000. Just do the math and you'll realize that it's a wise decision to purchase this insurance product. Refer to the resources listed below to learn more about ltci and its benefits.

What is Long-term Care Insurance? - Long-Term Care Information

Long Term Care Insurance Costs Compare Quotes from leading long term care insurance companies
2
roseharringtonroseharrington3 posts since
Feb 4, 2014
Rep Points: 7
6. Wednesday, February 26, 2014 - 1:24 PM
So we should save all our lives with the hope of leaving something to a loved one and then at the end, blow it all up into dust by purchasing this very expensive LTC policy or give it all up to a "Nursing Home"??  There must be a joke here. There is a better way and if you can't see it or accept it then there is going to be a lot of dust left after you cringe out your last days in that so called Nursing Home you gave all your money to either by a LTC policy or paying it with your beloved's inheritance.  Doesn't anyone on DA take vitamins or see their docs regularly other than myself?   There "are" other alternatives so why aren't we discussing those instead of where we are going to blow our savings? 
4
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,094
7. Thursday, February 27, 2014 - 8:31 AM
We did not buy nursing home insurance. I was able to care for my husband his last 5 years full-time and for the 13 years before that when he needed some care.  I am giving to the kids now, and my SS, little pension, RMDs'  and the sale of my home will keep me quite a few years in a nursing home if I have to go. The average time in a nursing home is 3 years but this is only average. I will have enough for more than that. 
2
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
8. Thursday, February 27, 2014 - 10:23 AM
The cost of a nursing home can vary quite a bit from state to state and depends on the care you will need. The $84,000 per year figure noted in the original post seems low and is probably just the cost of room and board.
Based on my recent experience with my father, his cost was about $300 per day for room and board. On top of this he needed dialysis, physical therapy, medicine etc…He was pretty much confined to a wheel chair so needed constant care.  His total cost came out to be between $15K to $20K per month so looking at $175,000 plus per year.
Shorebreak in post #1 states their LTC policy pays $147 plus daily so would cover less than half the cost based on my father’s example. Another very important item that is often overlooked is the location of the nursing home with regards to your friends and family. Using  Shorebreaks $147 per day coverage as an example. What if the nursing home nearest your family cost $300 per day but there was another nursing home that was located 100 miles away that only charged $140 per day. Which one would you choose? The $250 facility where you could have visitors most every day or the $140 location where you would see family maybe once a week?
Not to pick on Shorebreak again but after the $147 LTC pay out, hopefully my pension, SS and assets will pay the rest. Unfortunately we do not know what the rest is until it is too late. The whole thing is a crap shoot.
3
FARFAR91 posts since
Feb 26, 2013
Rep Points: 328
9. Thursday, February 27, 2014 - 10:44 AM
I believe Medicare will pay for physical therapy, dialysis (not sure) and medications with Part D. If he goes to Medicaid then that will cover depending on where you live.

Living is a crap shoot we never know if we will be hit by a car, get a diagnosis of the BIG C, or die peacefully in our sleep. Just can plan the best we can and hope for the best. I have lived longer than my brother, sister, mother and father and husband. I am, so far, beating the odds I am the only one left in my generation. I know by the chart from the link above I live in the most expensive city in our area but not as high as you stated that it cost your father. I just know one thing, I will not live and be a burden to my children. 
1
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
10. Thursday, February 27, 2014 - 11:24 AM
Ally, We did put my father on Medicaid. My mother is still living so we wanted their assets  to be protected for her.
Neither of my parents wanted to be a burden either. They had a family trust drawn up about 20 years ago and my father told us we had nothing to worry about. Everything was taken care of. My father was all upset that the trust had to be dissolved to apply for Medicaid. After he went in the nursing home he kept saying what did he do wrong to become a burden on everyone. He thought he had everything prepared. Like you state things happen and all you can do is hope for the best.
2
FARFAR91 posts since
Feb 26, 2013
Rep Points: 328
11. Thursday, February 27, 2014 - 11:43 AM
FAR:  Your dear father has nothing to feel badly about. It is very difficult for one to know what is the best way to handle things in this matter.  These Eldercare attorneys are very expensive to hire at this time, if needed.
2
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,094
12. Thursday, February 27, 2014 - 11:44 AM
I am looking for the calculator that is updated for each state for the current year. Maybe this will help but I am sure that going through this you have the information. 
Medicaid's Asset Rules | ElderLawAnswers 
1
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
13. Thursday, February 27, 2014 - 12:00 PM
Haven't found the calculator but did find this in my bookmarks.  Will Medicaid Take My House - Consumer Reports News 
2
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
14. Thursday, February 27, 2014 - 12:28 PM
The link that I was looking for and found said page no longer available but did find this-State Medicaid & CHIP Policies for 2014 | Medicaid.gov 
2
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
15. Thursday, February 27, 2014 - 12:51 PM
Each state sets its own limits but these are the parameters that are used.
http://www.medicaid.gov/Medicaid-...nt-2014.pd 

Do a google or use one of the above links to find your states limits. 
2
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
16. Thursday, February 27, 2014 - 1:07 PM
I was able to find any info I was interested in on this subject.
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,094
17. Thursday, February 27, 2014 - 1:23 PM
To 11---
Each state is different. Some states will attach a lien to the house and others will not. Some states will only go after any part of the estate that goes through probate and so if you have beneficiaries those assets are protected. Your state legislatures set up the Medicaid rules. That is why so many people who are not working will not have Medicaid now because the states set the rules. If they loose their jobs and have no children they also will have no health insurance. You have to check the state you live in. Also I believe the 5 year issue starts the 5 years look back  when you qualify for medicaid not 5 years before you went into the nursing home. One thing I do know is don't sign anything until you read the papers and have a lawyer go over them. Many for profit nursing homes will go after assets of family members and make them responsible for any unpaid bills. 
The assets that the spouse can keep are up to YOUR STATES legislature. So you will have to go to your rep and get the information or ask your states ELDER LAW LAWYERS. We have many lawyers and college students who man the phones to take questions and get back to you. They answer all your questions, send you the information you need and then ask for a donation. It is run by volunteers. Ours is called Elder Law of Michigan and is in the state capitol. We have Michigan State University there, many lawyers and actually a law school also. You might try a google for Your state and then put Elder Law question answered. Your state Elder Law blog etc. 
Have to take a grandchild to her tennis lesson and another to her gymnastic practice (4 hours) and keep the youngest until their parents get out of work. 
1
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
18. Thursday, February 27, 2014 - 2:22 PM
xxx
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,094
19. Thursday, February 27, 2014 - 2:42 PM
Paoli2- You are so right. No matter how hard you try to do the right thing something unexpected comes along or the rules are changed in mid stream. Laws are different for each state so no one answer fits all. My parents are from MD and the eldercare lawyer said as long as the spouse is living in the house the nursing home could not touch. If she were to die then the sale of the house would go to the nursing home. What the lawyer did is put me and my siblings on the deed to the house so that would protect the house and the nursing home could not touch even if my mother passed.  
For my father to be eligible for Medicaid my mother could not have more than $110,000 cash in the bank. This did not include the house the car or the contents of the house. All liquid cash above $110K we put in a two year annuity. The nursing home is listed as the beneficiary. If my mother passes and there is still money in the annuity the nursing home gets it. My father could not have more than I think $1,500 to his name. When his pension and SS check were direct deposited to his account it had to be paid to the nursing home.
The reason the family trust had to be dissolved is that my father was listed as the beneficiary for my mother. If my mother passed my father would inherit too much money to be eligible for Medicaid and we would have to start the process all over again. We also had to close out a couple CDS and consolidate other accounts so my mother just had one account to her name. Both my parents were savers (probably were I got it) and very private. Neither I nor my siblings knew anything about their finances before this all went down. This entire ordeal was a big worry for them as they lost control of their routine and privacy. The lawyers fee to take care of this was between $15K and $20K.
2
FARFAR91 posts since
Feb 26, 2013
Rep Points: 328
20. Thursday, February 27, 2014 - 5:17 PM
 #19     I no longer have the list and regulations and dollar amounts for each state. The link says no longer available or something like that. Each state writes their own laws. You will have to contact your state, your rep or an elder law agency, or law firm.

Our savings was meant for our retirement. We should and must pay our bills. Yes it is nice to leave money to our children but that is after our bills are paid.  To expect taxpayers to pay our bills while we look for a way to get out of paying our own bills is not what the law was meant to do.  It was meant to pay for the less fortunate.  We can try to avoid paying for nursing home  but the things we do  are only good until the laws are changed. We can't worry about avoiding to pay for ourselves. If we can pay we do and if we can't we can't. Taxpayers will pay. We can't always be 2 steps ahead of what our state legislators will do. Trying to do this is what makes these estate lawyers rich. 
2
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
21. Thursday, February 27, 2014 - 6:33 PM
#20    I don't think this discussion is about people not paying their bills.  In my case, it is about finding out what is available to us legally so that we can provide for our loved one within the laws of our State.  I certainly am not trying to get taxpayers to pay for my future care but if others know of ways I can provide for a loved one and still be able to pay (if necessary) any Nursing Home bills, I have a right to learn what is available and use it.  Some people give to their children ahead of time because they can afford to do so.  Others, like myself, are not in a position to do this since the money is also needed now for help and support.  I think I have gotten enough info on this subject.
1
paoli2paoli21,142 posts since
Aug 10, 2011
Rep Points: 5,094
AllyAlly778 posts since
Jan 16, 2010
Rep Points: 2,266
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