Money in the Middle

Sandwich Generation Talking About Money Up, Down and Across Generations

Cost of Long-term Care Continues to Climb

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Long-term care costs continue to rise whether care is for a nursing home, assisted living facility, home care or adult day care. The increase in costs reinforce the need for long-term care planning:  how you want to receive care and how you’ll pay for it. If you are a member of the sandwich generation this is an important issue for your future and your aging parents.

 According to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs.

  • Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year.
  • Assisted living costs also rose 3.3% on average to $3,131 per month.
  • Home health care aides now cost an average of $21 per hour, a 5% increase;
  • Adult day services run $67 per day, a 4.7% increase.

 Many of us think that we’ll just get care at home which will be less expensive.  It all depends.  If you need assistance most of the day and night, then it is not less expensive than other alternatives.  But, home care is what most of us want, so at least use these hourly figures to help map out realistic potential costs for long-term care.

 If you think you are going to need to assist an aging parent with their care, these figures can help you better plan for financial assistance you might want to provide.

 When it comes to paying for long-term care, there are basically three choices:

You can purchase long-term care insurance to cover those costs, you can look at self-funding and wall off some of your assets into very safe investments so the money will be available when you need it, or you can hope you don’t need it and if you do deplete your retirement savings and then count on government programs.

Remember, this is custodial care not medical care.  So don’t count on Medicare or your health insurance to pay the costs of care.

Rates for care vary dramatically in different parts of the country, and even different parts of the state.  For example, in Maryland where I live, the average rate for a private room in a nursing home is $258; assisted living averages $3,873, a home health aide averages $20 per hour; a homemaker aide $18 per hour; and adult day services $75 per day.

Head up to Maine or Massachusetts and the daily rate of nursing care can hit $300. The MetLife survey provides rates for all states.

So it is very important to plan based not only on where you live now, but the costs of the area you might be moving to in retirement. 

If you are working, your employer may offer long-term care insurance as a voluntary benefit which means you pay the costs, but the policy may have some additional benefits such as less stringent underwriting.

If you are retired and interested in long-term care insurance, check out individual policies through a local agent or membership groups which may offer a discount.  Just make sure you compare a couple different policies since rates can vary dramatically.

Resources:

2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services and Home Care Costs.  

Long-term care insurance quotes in Maryland.

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Written by Laura Rossman

October 29, 2009 at 2:26 pm

One Response

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  1. People need to start investigating long term care insurance and get serious about it.

    Tyson F. Gautreaux

    November 28, 2009 at 9:06 pm


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