When I am at speaking engagements and I come to the slide on my power point presentation on the current cost of long-term care, the look of surprise on the faces in front of me scares me. It tells me many seniors, and their families, have no idea how expensive long-term care (in all of its forms) can be. Of course it makes sense that providing quality care for seniors at home, or in a residential facility, should not be cheap. It is difficult and important work. Yet many of us just don’t plan for it or think about it until the need arises. It is important to consider a longevity plan in your estate plan if it is important to you to leave money or assets to loved ones and/or charity after you pass away.
Genworth, a long-term care insurance provider, recently released the findings of its 2106 survey on the costs of providing long-term care. Not surprisingly, costs have increased since the 2015 survey. In fact, costs have steadily risen over the past 13 years since Genworth began tracking them.
Long-term care can be provided in a variety of settings, as explained below, and many people use the full range of services over time as needs change and increase. Families are often shocked to find out how much long-term care can cost, especially when they learn that Medicare benefits are limited for these services. Unless the person has long-term care insurance, they will likely pay for this care out-of-pocket—from savings, home equity and, often, other family members’ assets. Knowing the kinds of services available, current costs and historical rates of cost increases can help us plan for future costs of long-term care.
Homemaker Services: These include help with “hands off” care such as cooking, cleaning, running errands and providing companionship. The national median hourly rate for 2016 is $20, up 2.56% from 2015—more than the average increase of 2.13% over the last five years. Locally, you can expect to pay $23 an hour.
Home Health Aide Services: This is “hand-on” personal care for which a skilled nurse does not need to be present. A home health aide will typically help with bathing, dressing, transferring and toileting. The national median hourly rate for 2016 is $20 ($3,813 per month, based on 44 hours of care per week), up 1.25% since 2015—slightly less than the average increase of 1.28% over the last five years. Again, locally you can expect to pay $23 an hour, or $4,385 per month.
Adult Day Health Care: These community-based facilities provide social and support services in a protective setting for those who are functionally and/or severely cognitively impaired, helping the individuals live more independently in the community and giving relief to caregivers. Most are designed to offer socialization, supervision and structured activities. Some provide personal care, transportation, medical management and meals. The national median daily rate is $68 ($1,473 per month, based on five days per week). This is a decrease of 1.25% from 2015 costs, but the average increase has been 2.53% over the last five years. Government subsidies may be available based on ability to pay. Locally, you can expect to pay $72 an hour ($1,562 per month based on five days per week).
Assisted Living Facilities: These residential facilities provide personal care, health services, and room and board, but the level of care may not be as extensive as that of a nursing home. Both small group homes and large multi-service facilities qualified as assisted living facilities for purposes of this survey. The national median monthly rate is $3,628, up .78% from 2015, with an average increase of 2.16% over the last five years. Locally, you can expect to pay $4,350 per month.
Nursing Home Care: These facilities often have a higher level of supervision and care than assisted living facilities, with personal care assistance, room and board, medication, therapies and rehabilitation, and 24-hour on-site nursing care. The national median daily rate for a semi-private room is $225 ($6,843 per month), up 2.27% since 2015, with an average increase of 3.12% over the last five years. National median daily rate for a private room is $253 ($7,695 per month), up 1.24% since 2015, with an average increase of 3.51% over the last five years. Locally, you can expect to pay $6,844 per month for a semi-private room and $7,908 for a private room.
Please think about these costs and plan in advance so you will have options, other than to spend a lifetime of savings. I can even help you preserve assets if you haven’t planned and you or a loved one needs care now. Please call me, Tamara Marshall, at 815-459-8800 to set up a consultation or you can email me at [email protected].