NURSING HOME COSTS ON THE RISE – DON’T JUST SIT THERE
A recent survey found that the cost of a nursing home is rising across the country. According to the survey, the national average cost of a nursing home room is $192 per day, or $70,000 per year. The average length of stay in a nursing home is 2.4 years, meaning that the average nursing home resident would spend $168,000 on nursing home care.
In New Jersey, I can tell you without the aid of a scientific survey that many nursing homes cost over $200 per day – with many costing $230 per day, or more. That’s $7,000 per month or $84,000 per year! So, the average New Jersey nursing home resident would spend $201,000.
And these daily averages only include the basic room, care, and board that a nursing home provides. Every nursing home resident will, inevitably, have monthly extras – such as prescription drugs, diapers, and laundry. In my experience, I have found that these extras can cost anywhere from $300 to $500 per month.
So, there is little doubt that nursing homes cost a significant amount of money, and the cost of a nursing home could easily deplete the life-time savings of most working- and middle-class individuals.
What’s even scarier, from a financial perspective, is that the concept of long-term care has truly become “long-term.” Nowadays, many people who require long-term care don’t go directly from no-care to a nursing home level of care.
Instead, many people receive care at home, employing the services of a home health aid, or they reside in an assisted living residence or continuing care retirement community years before they enter a nursing home.
Without question, it is nicer to receive care at home or to live in an assisted living residence than it is to live in a nursing home. But the cost of these forms of care is also very high.
Once again, I have not conducted a scientific study, but in my experience, the cost of a live-in home health aide is in the neighborhood of $3,500 and the cost of an assisted living residence is around $4,000 a month. More, if you require a higher level of care.
If a person were to live at an assisted living residence for three years, then live at a nursing home for 2.4 years before passing away, he would spend approximately $350,000 on his care before his death.
Needless to say, most people are concerned about the cost of long-term care. So, what are your options to protect your assets?
There are two educated solutions to the cost of long-term care. One is long-term care insurance. I didn’t mention this but it was MetLife that conducted the national survey of nursing home costs. This should come as little surprise. Insurance companies – like elder care attorneys – want to use the facts about long-tem care as a “call to action.”
The other solution is Medicaid planning. Medicaid is the only government program, of any significant, that pays for the cost of long-term care. Medicaid planning is a process through which a person divests themselves of assets, protecting those assets for their family’s benefit. The planning process can be rather complicated and is never a one-size-fits-all solution.
The important thing is for people to understand that solutions do exist and that you plan as early as possible. You don’t have to spend all or most of your money on long-term care.