At some point, someone you love may make the transition from living at home to residing at an assisted‐ living facility or nursing home. When should that transition occur, and what factors must be considered along the way? And what don’t these facilities tell you?
When is it time? If an elder is a) safe and content at home, b) in reasonably stable health, c) can draw on personal or family resources for in‐home care, d) has a sufficient “rotation” of family or professional caregivers available so as not to exhaust loved ones, then there may be no compelling reason for that elder to enter a nursing home or assisted‐living facility.
If, on the other hand, an elder’s health notably worsens and caregiving strains your own 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 insurance will often pay for home health aides, adult day care, and forms of at‐home nursing. This is called respite care, and perhaps 10‐15 hours of these services per week will do. LTC insurance covers respite care. Even without LTC coverage, this level of care may fit into your budget.
Will an assisted‐living facility suffice? If an elder is ambulatory and reasonably healthy, it might. Assisted‐living (allowing an elder to have their own space plus quality care) 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 long‐ term care insurance and private funds.
Is an assisted‐living facility several steps above a nursing home? Its marketing will tell you so; truth be told, many assisted‐living facilities are comparatively brighter, more comfortable and cheaper than nursing homes.
Keep in mind, however: many assisted‐living facilities do not offer their residents 24/7 medical attention, and costs may climb if your loved one needs or wants more than the basics in terms of care or comfort. According to Genworth’s 2016 Cost of Care Survey, the median yearly cost of a semi‐private room in a nursing home now exceeds $82,000.
Are insurers raising premiums for LTC policies? Yes, significantly. As a Money article notes, yearly premiums for the more expensive policies can now 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 (sometimes much more) have occurred with disturbing frequency in this decade.
Is long‐term care 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 (and other life insurance products) have emerged that offer an add‐on LTC benefit to consumers, for a price. Short‐term care policies, while long available through certain insurance companies, are 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?
First, let’s talk about nursing homes. 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, 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 a preponderance of 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 known and trusted 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. In some cases, that can be a plus; in other cases, a minus.
Timothy C. Hucks is a Certified Estate Planner™, an Investment Advisor Representative, and President of Rising Tide, Inc. He may be reached at www.risingtideinc.com or (919) 968-8675.
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