How much does an average nursing home cost?
31 August 2006I was reading this article in Kiplinger’s on why you shouldn’t expect much of an inheritance anymore, and I was a little stunned by these statistics:
The average cost of a nursing-home room in 2005 was $74,095. Assisted-living costs were $34,860.
I suppose it shouldn’t be all that shocking given the high costs of medical care - but a room for a single person costs more than most families make in a year! And frankly, I wouldn’t personally want to be in the “average” nursing home. You may or may not have to live in one - it’s really hard to tell. But in the never-ending debate future retirees have with themselves about how much income they’ll need to retire on, this is something you want to think about. I know, it’s like planning your own funeral. But a health problem that forces you into a nursing home could wipe many people out - and you’ll actually be around to feel the consequences if you don’t plan for it.
I found these old statistics from 1998 on this website that are still pretty disturbing. Back then, there were about 1.8 million nursing home beds - which should tell you something about your odds of ending up in one eventually. In 2000, there were 35 million people over the age of 65 - and only 4 million older than 85. It’s hard to estimate exactly how many people end up in a nursing home at some point. Here’s their guess:
43% of those people who turned age 65 in 1990 will enter a nursing home at some time during their life. The same study reported that among all persons who live to age 65, only 1 in 3 will spend three months or more in a nursing home; about 1 in 4 will spend one year or more in a nursing home; and only about 1 in 11 will spend five years or more in a nursing home.
So about ten percent of people will be more or less permanently in a nursing home, and many others will be there temporarily for health problems. I don’t like those odds myself.
And those 1998 numbers had an even worse tale to tell. Consider these little excerpts:
Pursuant to the passage of the Nursing Home Reform Act of 1987, the use of physical restraints has dropped about half. However it is indicated that still as many is 20 % of nursing home residents are at some point restrained.
Nurses aids average wage is $6.65 per hour.
According to a professor at the University of California,a nurses aid-the person providing the bulk of care by feeding, bathing and clothing patients-should have no more than three people to care for during a meal and no more than six during non-meal times. The ratio may be one aid for 15 patients during the night however. The article noted, however, that it is not unusual to find a lone nurses aid caring for his many as 30 people.
That means if you’re forced into a lower-cost nursing home, don’t expect a very happy lifestyle. This can affect your life in a big way, and you need to plan for the potential of it happening in your retirement. So what should you do?
1) You could save enough money to cover the cost if it happens. This means you need to have one of those multimillion dollar nest eggs. Not that hard if you’re in your twenties, as I’ve pointed out before - but if you’re older, it may not be possible. It’s the best option, but not the only one.
2) You could have really loving, caring family - or get a live-in nurse. Either way will save you some money and let you live in a real home. But what if that son or daughter who was supposed to take care of you in your old age turns out to be an ingrate? Or dies? Or what if your illness is so serious that you can’t live at home? Don’t bet on this option.
3) You could rely on Medicaid. This pays for the nursing home costs of many people. But it pays for CHEAP nursing homes, not good ones. That means you’ll be one of those 30 people the one minimum wage worker is trying to take care of and probably doesn’t really care all too much about.
4) You can get nursing home insurance. It’s also called long term care insurance. There’s a little short summary about how it works here - you insure yourself against needing either nursing home expenses or assisted living. You select how much per day you want to insure your potential expenses up to - so you can decide you want to be able to get into that expensive Florida home instead of the crooked one you saw on Sixty Minutes.
Discuss this on the Free the Drones Retirement Forums.
One Response to “How much does an average nursing home cost?”
September 5th, 2006 at 10:31 am
[...] How much does an average nursing home cost?A post about the cost of nursing homes in retirement and how to plan your retirement to protect you against that possibility. [...]