Long-Term Care Costs
The average monthly cost of a room in an assisted-living facility ranges from $3,000–$4,000 in most states, including California, Texas, and Florida. The states with the least expensive costs are Arkansas ($2,355) and North Dakota ($2,617); those with the most expensive are New Hampshire ($5,086) and Maine ($4,881). None of these dollar figures include the following monthly charges (source: WSJ):
|
Service |
Average monthly cost |
|
Medication management |
$347 |
|
Dressing assistance |
$236 |
|
Bathing assistance |
$181 |
|
Other personal care |
$504 |
The phrase “long-term care” includes a range of health and daily-living services that may be in the patient’s home or a facility. A number of these services do not include round-the-clock skilled-nursing care. The price of a private room at a nursing home averages $248 a day. The table below shows the average monthly rate for a room in an assisted-living facility, with different levels of services (source: MetLife).
2012 Average Monthly Rate for Assisted-Living Facility Room
|
|
< 5 Services |
6–9 Services |
10+ Services |
Alzheimer’s* |
|
Base rate |
$2,750 |
$3,490 |
$3,790 |
$4,810 |
* Alzheimer’s/dementia care
Strategies to Reduce LTC Costs
One strategy is to buy an immediate annuity that makes monthly payments for a specified number of years. This allows other assets to grow, thereby possibly protecting the estate or surviving spouse. The real benefit of this strategy is that the annuity payments are not counted when qualifying for Medicaid. The state has the first claim on any remaining annuity payments once the patient dies.
Families of wartime veterans may receive up to $2,020 a month from the Department of Veterans Affairs for those that qualify; single vets and surviving spouses may qualify for smaller monthly payments.
A less-expensive alternative to an assisted-living facility is an independent-living apartment. For the most part, these structures are merely age-restricted apartments. In recent years, many have added transportation, meals, and concierge services. Unlike continuing-care retirement communities, independent-living apartments do not require an upfront lump sum.
Home health care is often the most desirable option. For those who do not need 24-hour care, a person can be hired for ~ $20 an hour for housekeeping, meal preparation, dressing, bathing, and other hands-on assistance. Medicare’s Home Health Compare tool allows you to search for local agencies offering such services. An agency tacks on ~ 25%, so consider hiring a caregiver on your own.
Adult-day service provides social, health, and therapeutic services in a group setting for those who have functional or cognitive problems. Some offer a high level of medical care and charge an average daily rate of $80.
Respite care programs allow an older person to check into an assisted-living facility for a weekend or longer when a family caregiver needs to take a vacation or break. This option can help a family delay using a more expensive option.
LTC Costs for Women
Starting in 2013, women will be paying as much as 40% more than men for long-term care insurance issued by Genworth Financial, the nation’s largest long-term care insurer. Some large insurers, such as Prudential and MetLife, stopped selling long-term care (LTC) policies a few years ago. The price increase for women is likely modest to severe in all but two states: Montana and Colorado (both require insurers to use unisex rates).
For example, a 55-year-old woman buying $3,000-a-month coverage for three years (with a 3% annual CPI adjustment) will pay $2,000 a year in 2013; a man the same age will be paying $1,466 a year. Married couples can get a discount since their ages are “blended.” Same-sex and unmarried couples can also qualify for a discount.
In order to rein in risk, many insurers have tougher applications; blood samples are often taken to verify nicotine and drug use. Insurers frequently phone interview applicants under the age of 69 in order to test their memory skills. Some insurers also want to see if there are any indications of cardiovascular disease or stroke, the insurer’s biggest concerns after cognitive issues.