What’s The True Cost of Care?
By Matt Sussman, CLTC
Genworth Financial recently released their 2017 cost of care survey and the results may have you cleaning coffee off your screens. The results reflect the median cost of long term care services, which increased by 4.5% from 2016 to 2017. This is the second highest year-over-year increase in cost for long-term care in history.
There is some good news for us, though, as the Philadelphia area is not the average. When we think of being below-average, it is usually a negative connotation, and usually applied to the Phillies. In this case, however, I encourage you to embrace being below-average. The cost of a private nursing home increased by only 2%—to $131,400 a year—and the cost for a private one-bedroom unit in an assisted living facility increased by 3%—to $52,500 a year.
The most common type of care is at home. And the cost for a homemaker health aid increased to $52,620—or just over a 1% from 2016—based on 44 hours of care per week for 52 weeks. The U.S. Bureau of Labor Statistics reports that there are about 41.3 million people providing unpaid eldercare at home, and about one-fourth of eldercare providers engage in unpaid eldercare on a given day, spending an average of 2.8 hours providing this care.
The question I always like to ask folks when I meet with them is: What is your plan should you need care at home? In most cases, they don’t have a plan, as most folks think it will not happen to them.
It is very important for you and your family to have a plan in place. Having long term care insurance is certainly one option, but it is not the only option. The plan could be that, if you need care at home, your spouse will take care of you, your children will also help take care of you, or you may be earmarking funds that can be used to pay for a home health care individual to come in and take care of you. Or maybe even option “D”, all the above. But there should be something. As they say, failing to plan is a plan for failure.
We know when it comes to needing care in an assisted living facility or nursing home, there is no getting away from the tremendous costs. If you have not planned ahead, the only recourse is government assistance via Medicaid, which only kicks in once you and your spouse have spent down everything else.
There are more insurance options today than ever before to help pay for the care in a facility or even at home. Some plans even offer a death benefit paid out to the beneficiaries should the person covered never require long-term care.
If you think care in a home or facility is something you may need down the road and want to get a proper start on research, please contact Matt Sussman, CLTC at 800-789-5191 or [email protected].