“There’s a big disconnect between what resources people think they will need financially during their last years and what they actually do.”
According to a survey conducted a few years ago by the Associated Press-NORC Center for Public Affairs Research, 34% of Americans thought Medicare would cover ongoing nursing home care, and another 27% were unsure.
That’s not true, says WRAL’s recent post, “Expect Medicare to cover assisted living? Think again.” These results may correlate with the fact that only 37% of Americans think they’ll need any care in their later years, but in reality, about 70% will require this care.
Another survey by the AARP Policy Institute and the National Conference of State Legislatures found that 90% of people over 65 want to stay at home as long as possible—80% say they’ll live at home until they die.
Consider the cost: informal, independent caregivers can be $12-$18/hour. Trained and vetted Certified Nursing Assistants are at least $20-24+/hour, depending on the level of support needed. Round-the-clock agency care—even conservatively figuring a $20/hour rate—would cost approximately $14,400/month or $172,800/year.
Let’s now look at assisted living. Depending on geography, the cost for private-pay, month-to-month assisted living ranges from $2,500/month in a shared room to $7,500+/month in a private room. That’s about $30,000-$90,000/year. The average length of stay in assisted living is 28 months. Therefore, the total cost would be somewhere between $70,000 and $210,000.
The Centers for Disease Control and Prevention reports that 59% of all assisted living residents will eventually move to a skilled nursing facility. The average stay is 835 days. With four to five years of care, a family can spend $250,000 to $450,000 or more.
How much of this is covered by Medicare? About 12%, because Medicare covers only medical care costs.
Many seniors seek the help of an Elder Law attorney when they’re already in crisis. A parent has had a medical incident and is suddenly no longer able to live at home independently. An Elder Law attorney can help them come up with a short-term plan that meets the immediate financial needs and develop a longer-term plan that can respond to their needs over time. The Elder Law attorney will help you accept the new reality, and then work together to ensure that the parent or parents receive the care they need, while maintaining the lifestyle they want, and when possible, are able to protect their estate for future generations.
Reference: WRAL (September 16, 2017) “Expect Medicare to cover assisted living? Think again”