When we consider health care costs, we think of costly procedures or medication. Magnetic Resonance Imaging or MRIs is an example costing $2,000 - $4,000 with doctor’s fees additional. Medications used for anemia such as procrit can run over $6,000 for one course of medication.
What is rarely thought of is the cost of day to day long term care. Most people tend to think they will never need long-term care; however the fact is that more than 60% of Americans are expected to need some form of long-term care at some point in their lives. When they do need long term care, they are not prepared for the financial burden it may cause.
Most Americans believe that their private health insurance or Medicare will cover for all their health care needs. Contrary to this belief, insurance does not cover the greatest need for long term care: custodial care.
When you or a loved one is stricken with a chronic or degenerative condition such as diabetes, cancer, a stroke or Alzheimer's performing simple Activities of Daily Living becomes impossible without the assistance of another person. Chronic illnesses and disabilities require personal care, meal preparation, assistance with bathing and ambulation. This type of care is custodial care not medical care therefore it is usually not covered by health insurance.
Custodial care is a term for care provided to patients on an on-going maintenance basis. Most care at home and the majority of care in nursing homes is considered custodial. Non-medical care that helps an individual with his or her activities of daily living, preparation of special diets and self-administration of medication not requiring constant attention of medical personnel.
MetLife Mature Market Institute reports that the cost of private and semi-private nursing home rooms in the United States increased an average of more than three percent, in 2007.
The average cost of a private room in a nursing home this year was $213 a day ($77,745 a year), compared with $206 a day in 2006. A semi-private room cost $189 a day in 2007, compared to $183 a day last year. This rate generally reflects just room and board in a nursing home with therapies, tests, physician visits and medication charged in addition to the basic rate.
Alaska had the highest nursing home rates ($510 daily or $15,300/monthly) in 2007, while Baton Rouge, La., had the lowest rates ($123 daily or $3690/monthly). I am from New York which averages $ 340 a day or $10,300/ monthly.
Assisted living rates nationwide were $2,969 monthly in 2007 ($35,628 yearly) in 2007. Assisted living rates were highest in the Washington, D.C., area ($5,031 monthly) and lowest in Indianapolis ($1,963 monthly).
Another study by MetLife reported that the national average cost of Home Health Aide Services nationwide was $19/hour and the national average hourly rate for a companion or homemaker is $18/hour. The highest rates being in Rochester Minnesota at $30/hour for Home Health Aide and $25/hour for Companion or homemaker. The lowest rate in Shreveport, Louisiana was $13/hour for Home Health Aide and $12 for a companion or homemaker.
- To find out the cost in your area for Home Health Aide, Assisted Living Facilities and Skilled Nursing Home rates check the following MetLife Studies:
Assisted Living
http://www.metlife.com/WPSAssets/12768452431193759307V1F2007NH.AL.pdf
Home Health Aide
http://www.metlife.com/WPSAssets/56853157701190812646V1F2007ADSHCCStudy.pdf
Skilled Nursing Homes
http://www.metlife.com/WPSAssets/21052872211163445734V1F2006NHHCMarketSurvey.pdf
Medicaid will eventually pay for your long term care expenses; however the benefits only begin after the majority of your assets have been depleted.
In my home state of New York Medicaid does cover custodial care for Home Attendant Services, Housekeepers and Homemakers but Medicaid and most public long-term care (LTC) programs vary from state to state. In most states Medicaid covers custodial care only as long as it is provided within a nursing facility. Custodial care at home is typically covered only under LTC insurance - not by Medicaid in most states.
Medicare, on the other hand, covers only medically necessary, skilled care and will cover at-home custodial care only if it is provided in conjunction with skilled care. This means that as long as there is a need for a registered nurse or therapist to visit intermittently limited Home Health Aide services can be covered by Medicare. Medicare can cover nursing home for up to 100 days a year if there is a skilled need for short term rehabilitation or intravenous antibiotics therapy.
This leaves private pay or long term care insurance as the primary options for care. Even if you are financially independent custodial care can be costly. A Home Health Aide in Rochester Minnesota to cover just custodial care for a loved one or yourself for 24 hours a day would cost $ 720/day or more than a quarter of a million dollars a year. Consider also that almost 60% of the nursing home residents were institutionalized more than a year with the average stay in a nursing home being 2.5 years. In Alaska that length of stay could run almost a half a million dollars.
Long term care options will be discussed in a future article but check out the following sites for information on Long Term Care.
Long Term Care
http://www.investopedia.com/articles/04/112904.asp?partner=answers
http://www.mrltc.com/
Medicare
http://www.medicare.gov/
Medicare Long term care
http://www.medicare.gov/LongTermCare/Static/Home.asp
National Clearing house founded by the US Dept Health and Human Services.
http://www.longtermcare.gov/LTC/Main_Site/index.aspx
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