Archive for January, 2015

Nursing Home Costs $7,650 Per Month. How Can $50 Per Day Help?

January 19, 2015

The median monthly Metro-Denver nursing home (private room) cost is $7,650.  I have often said that “almost any long term care policy is better than no policy!”.  In light of $7,650 per month, how can a long term care insurance policy paying only a $50 per day benefit make a difference?  Let me count the ways:

  1. Most long term care happens at home, not in a facility.  Home is where people want to stay.  For $50 per day, quality Metro-Denver home care agencies can provide two hours per day, seven days per week, 365 days per year, of trained professional caregiving.  Imagine a spouse or adult daughter struggling to care for a loved one.  Two hours per day of outside help could take care of bathing, dressing & perhaps feeding one of the daily meals.  Would this be helpful?  Could two hours per day, every day, remove a major source of caregiver angst (having to bathe a loved one)?  And give the caregiver (usually a “her”) some time for herself?  A $50 daily benefit, combined with an appropriate monthly instead of daily benefit cap, could be used to give four hours of paid help every other day.  Or eight hours every fourth day…and so on.  Could this take some pressure off an overburdened family caregiver?

  2. Adult day care: A $50 policy daily benefit (again, with the policy benefit expressed as a monthly cap of $1,500) would cover $68 of the $77 daily Metro-Denver adult day care cost.  Note: Excluding weekends & holidays, there are 22 work days in an average month.  $1,500 divided by 22 = $68.18.  Would enough cash to pay almost the full cost of eight hours per day of reliable care each & every work day be beneficial to the beleaguered family caregiver?

  3. Assisted Living: The median Metro-Denver assisted living facility base monthly cost is $3,773.  Would covering 40% of the monthly assisted living cost be better than having to pay 100% of that cost out-of-pocket?

  4. Nursing Home: Median cost of a private room in a Metro-Denver nursing home is $7,756 per month.  A semi-private room is a little less expensive at $6,540 per month.  Would $1,500 per month, received tax-free, toward that bill be helpful?

In all the above examples, the family (and the person needing care) retains choices about where care will be provided and by whom.  Most of us, myself included, would much rather stay in our own homes.  A $50 daily benefit, paying for two hours per day of professional home care, will often allow that to happen.

All this sounds as if I am advocating that people should buy the smallest benefit ($50 per day) long term care insurance policy available.  I am not.  If affordable, a policy should be applied for that covers most of the cost of a multi-year nursing home stay.  My point is that even the smallest, most affordable, long term care insurance policy will make a tremendous difference with a family struggling to cope with the high cost of long term care services.  A policy having a $50 per day/$1,500 per month benefit, & without bells & whistles, will be very, very affordable.  For your family’s lifestyle sake, do not let the common misperception of “long term care insurance is expensive” keep you from looking into this important protection.

A few words about cost of care: For the past eleven years, Genworth Financial has conducted a comprehensive annual survey of long term care costs broken down by metropolitan area & type of care provider.  The median costs cited in this article are taken directly from the 2014 survey & are for the Denver, CO metropolitan area.  Nationally, Denver costs of care fall somewhere near the middle.  Care is more expensive in some parts of the United states & less expensive in others.  Please contact me if you would like to know about care costs in a particular location…or about how affordable a meaningful policy can actually be for you.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence. Long term care insurance policies vary widely from company to company & often 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, 2015