Long-term Care Costs Continue to Climb
Genworth Financial, a financial services provider, released the “2008 Cost of Care Survey,” its fifth annual study of prices for home care providers, adult day health care facilities, assisted living facilities, and nursing homes. The survey doesn’t have great news. As with most everything in life, the costs are going up—but in this case especially, they’re going up at a time when you’re least likely to afford it.
The survey noted the following national averages:
- Assisted living facility (private one-bedroom): $3,008/month
- Nursing home (semi-private room): $187/day
- Nursing home (private room): $209/day
- Homemaker services (non–Medicare certified): $18/hour
- Home health aide services (non–Medicare certified): $19/hour
- Home health aide services (Medicare certified): $38/hour
- Adult day health care: $59/day
The cost of care within facility-based providers has steadily increased, while costs for home care from nonskilled providers have remained relatively flat. In 2008, the average annual rate for a private nursing home room was $76,460, compared with $65,185 in 2004, a 17% increase. The average annual rate for assisted living (private one-bedroom) in 2008 was $36,090, a 25% increase from 2004, according to Retirement Weekly. In contrast, non-Medicare-certified home health aides earned $19/hour in 2008; in 2004, they earned $18/hour.
This was the first year the category of adult day health care (ADHC) was included. ADHC includes structured social, health, and other services that take place “in a protective setting.” They are intended to help enable individuals to live more independently in the community and may also be intended to provide some relief for family caregivers. Genworth noted that ADHC is becoming more available across the country.
In analyzing the reasons behind the high cost of care, Genworth wrote, “One key factor to note is that the U.S. is facing a critical long-term care labor shortage that will have significant implications on the quality and drastically increase the cost of care.” Considering the demands on the health care system that aging baby boomers will create, “It is imperative that . . . we recruit, cultivate, and retain a highly trained workforce.”
Genworth’s Web site has an interactive 2008 Cost of Care Map of the United States that lets you see, state-by-state, costs for nursing homes, assisted living, adult day health care, home health aides, and homemaker services. You can also find details about the cost of care closer to your city by visiting the Federal Long-Term Care Insurance Program site.
Who pays for all this? The U.S. Department of Health and Human Services notes that if you have sufficient income and assets, you are likely to pay for your long-term care needs out of those private resources. If you qualify and have limited financial resources, or are depleting them paying for care, Medicaid may pay for your care. If you require primarily skilled or recuperative care for a short time, Medicare may pay. The Older Americans Act is another federal program that helps pay for long-term care services. Some people use a variety of payment sources as their care needs and financial circumstances change. A chart at the department’s Web site gives an overview of who pays for what.
For more information on paying for long-term care, and for more about the survey, see the Source list below.
Published August 18, 2008
Susan Hindman
Silver Planet Feature Writer
Introduction
To learn more on this subject, I highly suggest you visit Wikipedia entry on Long Term Care: http://en.wikipedia.org/wiki/Long_term_care
This article is of definite relevance. Please view it by clicking on the link below or simply reading it on this page.
http://ezinearticles.com/?Long-Term-Care-and-Life-Settlements&id=1593460
Learn more about life settlements at http://www.milestonesettlements.com/
Long-Term Care & Life Settlements
Life Settlements serve as a practical option for those burdened with the high costs of long-term care.
By Derek Wilsey
JUNE 2008
As the number of baby boomers heading towards retirement begins to increase subsequently so will the need for long-term care. Long-term care provides services that act as an essential support system for many senior citizens who require assistance with daily living activities. While long-term care is most definitely a benefit to families who need assistance caring for the elderly, it can also pose as a severe financial burden as it is generally not covered by Medicare.
Long-term care includes of both medical and non medical services. Majority of long-term care involves assisting senior citizen with daily living activities. These daily living activities can include anything from using the restroom to shopping for groceries. The care provided in daily activities such as these are considered non skilled or “custodial” care and are not paid for by Medicare. According to a study conducted by Genworth Financial in 2006, long-term care costs over $70,000 a year on average. The similar study conducted by Genworth in 2007 showed little difference in pricing for a single bedroom in a nursing home. The average annual cost for a private room in a nursing home was $74,806. With the current cost of living accumulating as it is, the expenses of long-term care for elderly family members often places a financial burden on loved ones. Majority of individuals do not possess the means for funding this care and have limited options to explore, forcing them to take out loans and obtain debt in order to take care of the family member needing the long-term care.
A solution to this problem has emerged in recent years in the form of the life settlement market. For those unfamiliar with life settlements, a life settlement is the sale of an existing life insurance policy to a third party for an amount exceeding the cash surrender value offered by the life insurance company. Once this transaction is complete, the individual is able to spend the cash received any way they see fit. The institutional investor that purchased the policy will continue to pay the premiums until the death of the insured, at which time they will receive the death benefit from the policy. There are only two other options for disposing of a life insurance policy. The individual can either stop paying the premiums and let the policy lapse, in this case they would receive nothing; or, the individual can sell the policy back to the insurance company for the cash surrender value. Offers provided in life settlements typically exceed the cash surrender value by three to four times the monetary amount.
For those who require long-term care, but cannot afford the increasing expenses that entail, a life settlement is the perfect solution. An individual is able to sell his or her existing policy and use the money received through the life settlement transaction to purchase long-term care insurance. If the individual does not qualify for long-term care insurance, he or she is able to use the cash received to pay for their long-term care needs. A life settlement can lift the financial burden off the shoulders of a policyholder and their family.
There are numerous reasons an individual would consider the life settlement option. Maybe your insurance needs have changed, the premiums have simply become too costly, or maybe you have come across some unexpected expenses. Whatever the reason, a life settlement may serve as the best possible option for any and all individuals considering selling a life insurance policy.