How much does long-term care cost?

Unless you’ve had a loved one or family member spend some time in a nursing home, you’re probably like most americans and are unaware of the full costs of long-term care. Because long-term care isn’t covered by Medicare or by primary health insurance, many people face an unfortunate sticker shock when faced with the costs to find great care when they need it the most.

The need for long-term care arises as people age and face chronic conditions that prevent them from being able to live independently (e.g., they need help eating, getting dressed, using the restroom, etc.). Some examples of events or conditions that could lead to a need for long-term care:

  • Stroke
  • Injuries from a fall or other activity
  • Cancer
  • Alzheimer’s
  • Etc.

In this post I break down the different types of costs associated with long-term care, how those costs vary across the country, and how likely someone is to need long-term care in order to help you try to estimate your expected costs.

Nursing home costs

Sometimes referred to as “Skilled Nursing Facilities”, nursing homes provide a high level of both personal and medical care (generally the highest level of care that you find outside of a hospital). While skilled nursing facilities are great for people who need a lot of care and constant, round-the-clock monitoring, they do not generally offer much independence and can feel sort of like, well, living in a hospital. These facilities are the most expensive long-term care option.

The price of these facilities varies widely depending on region and quality. According to seniorliving.org, nursing home care can range from $4,471 per month for a semi-private room in Oklahoma, to $13,505 per month for a private room in Connecticut.

According to a 2005 study (Kemper, Komisar, and Alecxih), the average person during 65 today will need 10 months of nursing care (on average), leading to expected of costs $44,700 dollars for that semi-private room in Oklahoma or $135,000 for the private room in Connecticut.

Assisted living costs

Assisted living facilities provide substantially less care (especially medical care) than nursing homes, and best suited for people who can still mostly take care of themselves. People choose to move into assisted living facilities when they need occasional help with some activities to keep them living independently like homemaking tasks or medication management. Often, these types of facilities provide apartment-like living situations with extensive common areas and outside grounds.

According the same 2005 study, the average 65 year old will utilize 3.6 months of assisted living care (in addition to the 10 months of nursing care listed above). Similarly, according to Genworth’s cost of care study, prices for a room in an assisted living facility range from $2,800 per month in Oklahoma to $5,400 per month in Delaware on average.

This averages out to an expected cost ranging from $10,000 in Oklahoma to $19,400 in Delaware. Combined with the nursing home costs listed above, we’re seeing ranges in average costs from $65,000 to $140,000 for the combination of nursing and assisted living costs for the average individual.

Home care costs

Increasingly, people prefer to live in their homes for as long as possible. However, with age and disability, this can become impractical or even dangerous for some people without extra help. If you prefer to stay in your home, you can hire home-health aides to help with homemaking tasks (cleaning, cooking, shopping) or assistance with other common activities. While there are many advantages to going the in-home care route, it requires more effort to schedule and coordinate care and doesn’t provide round-the-clock support in case of emergencies.

Home care costs are difficult to estimate because the costs can vary widely depending on how many hours of care you need and the specific types of services you want. However, according to Genworth the average cost of home care average around $4,000 per month throughout the country. Given that the average 65 year old will utilize 6 months of paid, formal in-home care, that works out to another $24,000 of average costs.

To keep the tally running, with expected nursing home, independent living, and home health care utilization, we’re looking at costs ranging from $99,000 in the cheapest locations to $166,000 in the most expensive.

Other types of costs

Outside of the financial costs associated with long-term care, there is an incredibly important cost which many families bear but which often goes under-reported: the uncompensated efforts put in by family members to care for their loved ones who need help. Often, when a parent needs more help around the house, a child will either move in or move closer to home to help out. This can be costly for the child who may have to pause their career, and it can lead to familial fights and tensions about who is bearing the burden.

The Kemper study estimates that people turning 65 today will utilize 17 months of informal, in-home care. That’s 17 months of care provided by uncompensated friends and family members which, while it might not come like a bill in the mail, surely has a cost.

Summing it up

In the preceding discussion we did some back-of-the-envelope calculations on the expected costs of care for the average 65 year old. We saw that the expected costs ranges from $99,000 in Oklahoma (the cheapest state) to well north of $150,000 in Connecticut (the most expensive).

Unfortunately, most people aren’t average. While some people will be lucky enough to never need long-term care at all, there will be some of us who will need quite a lot. In our nursing home care example, we used the expected value of 10 months of care — this masks a fair amount of variation: while 65% of people won’t need any nursing home care at all, 18% will need 1 year or more and 13% will need 2 years or more. If you’re one of those unfortunate 13%, you’d be looking at nursing home costs (alone) ranging from $107,000 to $324,000 depending on your geography. When you include the other types of long-term care service costs that one might require, the costs can become astronomical.

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