The Most Expensive States for Nursing Home Care - Costs for Nursing Home Care Can Run into Six Figures Depending on Where You Live

Excerpts from Philomath News, 02/16/24: "Most Americans over the age of 65 will require some sort of long-term care in their later lives. About 1 in 3 will require the costliest kind of care—that of a skilled nursing home facility." ...and… "The average cost for one year of care at a skilled nursing home facility was $108,405 in 2021, according to the latest estimates available from Genworth. It’s a figure that’s grown more than 3% since 2017 and doesn’t include the impact of record inflation since then." ...and… "The outlook for the cost of care nationwide could worsen over the next decade as calls for federal and state-level solutions continue. Demand for nurse professionals and nursing home care is expected to explode over the next six years with the Census Bureau forecasting the entire baby boomer generation will be aged 65 or older by 2030."

Our take: What a sobering read. Even as licensed financial and insurance professionals and industry publishers who consume 'a lot' of industry news (to glean and share insights with Silver.BUZZ subscribers), we were taken aback by some details shared in the article—and even more so by the graphic below. Read the title of the graph—a few times—and think through the point being made about just how high the most expensive state is with respect to Long-Term Care (and related) services, and just how high even the next state in line is, etc. It's really something.

Several references to the growth of the eligible pools of care-needing adults and shortage of able and willing caregivers suggest a math collision is about to occur, with the relative scarcity of caregivers (some of whom are also 'aging out' themselves) driving salary levels to attract workers higher and higher, again adding to increasing rates on Nursing and Long-Term Care facilities. It's not clear how lower- or higher-population geographies will fare in the increasingly competitive senior care market. Read full article.

I'm 68 and My Long-Term Care Insurance Now Costs $600 Per Month. Is This Too Much?

Excerpt from yahoo! finance, 02/01/24: Health insurance and Medicare, on the other hand, don't pay for residential care. This is what makes long-term care insurance so important for retirement planning. As the American Council on Aging found in 2021, staying in a nursing home can cost more than $100,000 per year. Meanwhile, the median cost of a private room in a nursing home is expected to reach $13,267 per month by 2034, according to Genworth.

Our take: 'Shocking' doesn't quite capture our reaction to the cost estimates for 'long term care' in the article. Adding clarity, Medicare will cover most medical services during a long-term care (or nursing home) stay, raising questions about what exactly one is paying for. As the article mentions, 'It is not uncommon for people to sell off family homes and liquidate their retirement portfolios to afford assisted living.' The gut-wrenching reality begins to set in. Long-term care policy costs hinge on several key factors: your age when purchasing the policy, coverage amount (usually less than 50% of the monthly bill!), duration of coverage (lifetime or capped years), whether coverage levels grow with inflation, and other policy-specific variables. It's worth noting that other financial planning aspects may impact how you pay for long term care, such as asset liquidity, whether a spouse remains in the 'family home,' and more. Perhaps you gifted assets to family over five years ago, or your home is in a specific trust — maybe you'd be fine with a Medicaid shared room. There's a lot to consider, and sooner is better. Read full article.