Archive for February, 2012

Met Life Annual Cost of Care Survey

February 28, 2012

The average cost of a private room in a Metro-Denver nursing home has now grown to $235 per day = $7,148 per month = $85,775 per year.  And this cost continues to increase.  But you say that you are never going to a nursing home (and you probably won’t).  At $24 per hour for a home health aide, 10 hours per day of home care will cost more than a nursing home. 

Here are the average costs of long term care from the October, 2011 Met Life Mature Market Institute annual survey:

Nursing Home (private room).  National: $239/day, $87,235/year.  Metro-Denver: $235/day, $85,775/year.

Nursing Home (semi-private room).  National: $214/day, $78,110/year.  Metro-Denver: $217/day, $79,205/year.

Assisted Living base* cost.  National: $3,477/month, $41,724/year.  Metro-Denver: $2,730/month, $32,760/year. 

Home Health Aide.  National: $21/hour.  Metro-Denver: $24/hour.

Homemaker/Companion Care.  National: $19/hour.  Metro-Denver: $22/hour.

Adult Day Care.  National: $70/day.  Metro-Denver: $66/day.

Denver is close to the national averages.

More about assisted living.  I believe the Metro-Denver assisted living average “base” rate of $3,477 per month is misleadingly (however unintentional) low.  This is because most assisted living facilities charge extra for extra services.  Here are some national average extra charges taken from the Met Life Mature Market Institute annual survey: Assistance with bathing, $307/month.  Assistance with dressing, $352/month.  Medication management, $370/month.  My best guess is the Metro-Denver average cost, as actually paid by residents, is close to $3,600/month.  That is the average assisted living monthly cost reported by the earlier (April, 2011) Genworth Financial survey.  The reported average cost is just that…average.  There is a wide range of what assisted living facilities charge and what is included.

One final caution: A number of cost of long term care surveys are published every year.  From a statistical analysis viewpoint, the samples are all different.  The study methodologies are all different.  The results, while usually in the same ballpark, are all different.  You cannot draw any conclusions by comparing one source’s study with that of another.  The bottom line is this: Long term care services will cost you and your family a lot of money.  It is imperative that you have a plan that answers the question, “How are you going to pay for long term care when you need it?”.

For what it is worth, I generally follow the annual cost studies published by the Met Life Mature Market Institute and Genworth Financial.  Both have been around for a long time and both use consistent (but each is different) methodologies from study to study.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term insurance policies vary from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2012

 

Do This For Your Family…Please

February 21, 2012

The following article is reprinted with permission from Broker World Magazine.  While written for an insurance agent/broker audience, this applies to everyone who cares about anyone.

“To honor his recently deceased brother, Jack Chiasson, executive director of the National association of Independent Life Brokerage Agencies, wrote the following article to help others.   Most of you know that I lost my younger brother a little while ago.  Chris was a financial advisor for his entire (and entirely too short) professional life, and he did what all financial advisors do—he encouraged people to plan for the future and to think about what would happen if something happened to them.

Chris was very successful, but I suspect that, like the physician who makes a terrible patient, he didn’t always take his own advice.  Oh, sure he had life insurance, a 401(k) plan and a college fund started for his young son, but there were a lot of things  he didn’t do.  I’m sure he thought he had lots of time to take care of the simple details.  He didn’t.

So, as a combination “public service” and a memorial to my brother, I offer the following.  I would love to believe that those reading this will say, “We know this…you’re preaching to the choir.”  I hope I’m right.

First and foremost—if you don’t have a will, you should.  Even if you use one of the many “simple wills” available at your local software seller, do so.  If your needs are more complicated than what these will accommodate, call your lawyer today.  It’s absolutely worth the money.  Oh—and make sure someone knows where it is!

Second, make a list of each and every insurance policy you own.  List the name of the policyholder, the face amount, the policy number and any other pertinent details. Also, indicate how your survivors  will be able to collect on that policy—list the phone number for the claims department for each policy, and provide a general list of what will need to be submitted with the claim.

On that same list, provide all of your bank information: savings, checking and other accounts.  List the name and location of the bank(s), the account number(s) and a phone number for each establishment.  As with the insurance information in the preceding paragraph, give a brief description of what your survivors will have to do to get the money.

Next, if you  have your own financial advisor, a lawyer, a stock broker, an insurance agent, or any other type of advisor, list their names and contact information as well.  These are the people who know where the assets are and can help guide your survivors at a time of great distress, helping to make the worry about “what am I going to do now?” much less stressful.

The next part is really hard to read, to write and to talk about with people you love.

Have a conversation with your spouse/partner/significant other, with your kids and/or grandkids about your thoughts on the end of your life.  Do you want to be buried?  Where?  Do you already own a cemetery plot?  Add the location and other information to your list.  Would you prefer to be cremated?  What would you like done with your ashes?  Do you want a particular kind of religious service?  Tell someone all of these things, and make sure it’s written down somewhere—preferably in the same location as your will and the lists described above.

Consider pre-planning the end of your life.  It’s not fun or glamorous—and it’s certainly not pleasant to think about, but you’ve been a planner for your whole life up to thatpoint…why stop there?

Make it simple for your survivors to honor your wishes by letting them know what those wishes are.  Make it simple for them to continue to enjoy the life that you have been able to provide for them.

I’m sure that by now you can guess all of the things that my brother didn’t do.  Perhaps even more than wishing him back with us, I wish he had taken his own advice.  It might be possible for his family to more easily cope with the loss of their husband and father if they didn’t have to worry about what the future—especially the very near future holds for them financially.”

 

Pre-need planning is something I urge you to consider doing.  It is a process in which you decide, and pre-arrange, what you want for a memorial service and burial or cremation.  This removes a tremendous burden from family and friends.  The best person I know for help with pre-need is Jamie Sarche.  She can be reached at 720-404-6772 or jamie@feldmanmortuary.com.  I highly recommend Jamie…she did a great job for my wife and I.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term insurance policies vary from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2012