You may reach a point in your life when you or someone you love moves to an assisted-living facility or nursing home. At Kendall Capital, we help our clients prepare for this life change for themselves or their loved ones by explaining and guiding our clients through the potential financial planning challenges they may face in order to make the transition as stress-free as possible.
When is it time? If an elder is safe at home, in reasonably stable health, and has a sufficient “rotation” of family or professional caregivers available, there may be no compelling reason for that elder to enter a nursing home or assisted-living facility. Alternatively, if an elder’s health notably worsens and caregiving strains your health, relationships and/or resources, then the time may have arrived.
If it is time, is a nursing home really necessary? It may not be. Keep in mind that long-term care (LTC) insurance will often cover respite care services including: home health aides, adult day care, and forms of at-home nursing. In many cases, care for 10-15 hours per week will do. Even without LTC coverage, this level of care may be affordable.
Will an assisted-living facility suffice? If an elder is ambulatory and reasonably healthy, it might. Assisted-living costs much less than nursing home care, usually tens of thousands of dollars less annually. A Place for Mom’s Senior Living Price Index estimates the savings at $1,600-$2,300 a month. Most people pay for it using a combination of LTC insurance and private funds.
Is an assisted-living facility favorable to a nursing home? Assisted-living facilities are comparatively brighter, more comfortable and cheaper than nursing homes. However, many assisted-living facilities do not offer residents 24/7 medical attention, and costs rise if an elder needs or wants additional care. According to Genworth’s 2016 Cost of Care Survey, the median yearly cost of a semi-private room in a nursing home exceeds $82,000.
Are insurers raising premiums for LTC policies? Yes, significantly. As a Money article notes, yearly premiums for more expensive policies can exceed $2,300 for a 55-year-old man and $4,406 for a 55-year-old woman. Annual premium increases of 10% or more have occurred with disturbing frequency in this decade.
Is LTC insurance worth the cost, with the possibility that benefits may go unused? In some cases, it may not be. As CNBC notes, households with $2 million or more in assets may not need LTC coverage at all, while those with savings of less than $100,000 may get much of the help they need from Medicaid when the time comes.
Alternatives have surfaced to traditional LTC insurance coverage. Recently, “hybrid” life insurance policies have emerged that offer LTC benefits to consumers, for a price. Short-term care policies are also getting a second look. Some have benefit periods as long as a year, and they may be the only option for seniors with conditions that would disqualify them for an LTC policy.
What isn’t said about eldercare? Nursing homes and assisted-living facilities are not predisposed to tell you about the downsides to their communities. So what isn’t usually expressed on the tour or in the brochure?
Genworth’s 2016 survey notes that the national median price for the typical shared room at a nursing home is $225 per day. Imagine handling that without help from LTC insurance or Medicaid. Medicare will not pay for long-term nursing home care or home health care.
According to the Centers for Disease Control and Prevention (CDC), an elder is twice as likely to suffer a fall in a nursing home as he or she is in the community. In fact, the CDC says that the average nursing home patient suffers 2.6 falls per year and that physical restraints do nothing to reduce the risk. If you have ever visited a nursing home and noticed many residents in wheelchairs, it may be a response to liability as much as disability. A corollary to this: if residents are discouraged from being ambulatory, their leg strength may quickly diminish.
If your parent or grandparent has had a family doctor for decades, there is a risk that the relationship may wane or end after a move to an eldercare facility. Nursing home residents are placed under the care of one or more staff physicians who more or less become their primary doctors.
The rules and regulations governing care at assisted-living facilities can vary greatly among states and counties, and, while nursing home ratings are relatively easy to find online, reviews of assisted-living facilities are not. When considering an assisted-living facility, it is worth remembering that more than 80% of residential care facilities are for-profit businesses; roughly 40% of these facilities are outposts of national chains.
You may know someone whose parent or grandparent was asked to leave an assisted-living community. This circumstance isn’t rare, especially if an elder copes poorly with the advance of dementia. If a resident is particularly difficult, the possibility of eviction may arise.
When the time comes, stay involved. Our lives are often busier than we want them to be, but our elders count on us to be visible and engaged in their lives after they enter assisted-living facilities or nursing homes. Your vigilance and support can make a difference in the experience for the one you love.