Nursing homes are institutions that care for our elderly relatives. They provide basic services such as food and hygiene, as well as medical support and on-site emergency responders.
They were never cheap. But, unfortunately, according to a study by Georgetown University, they look like they might be getting even more expensive.
Nursing Home Costs Are Skyrocketing
The six-year study looked into the dynamics determining the price of long-term care in the US. What they found was startling: care costs are dramatically outstripping inflation. Prices have risen by around 10 percent per year over the last decade – well above the rate of inflation – and look to be going up faster and faster as we head into the future.
It’s not just a problem with demand, either. In fact, we’re yet to see the baby boomers using care home services en masse. A few are right now, but the majority will only require nursing home assistance in the coming decades. The issue is one of how the industry structures itself, and the sheer amount of regulation.
Those who stay long-term will suffer most. A person with dementia in a care home is likely to cost around $100,000 a year at present prices – way above the sustainable level. What’s more, medicare probably won’t cover it because it counts as custodial care. That can put further pressures on family finances and, in some cases, wipe them out.
Nest Eggs Are Being Raided
To pay these high fees, some elderly relatives are raiding their nest eggs – piles of money they’d accumulated for future generations. After just a few years of care, some of these can be depleted entirely, with nothing left over for younger growing families.
The Georgetown University study found that nursing home care prices were increasing at around three times the rate of Medicare prices, and more than five times the general inflation level.
To make matters worse, putting an elderly relative into a nursing home might actually be dangerous. According to Nursing Home Law Center LLC, the majority of residents experience some sort of abuse during their tenure.
For this reason, it is critical that family members exercise continuous oversight over nursing home conditions. They should also make it clear up front that they will prosecute if there is any sign of foul play. Action like this protects elderly relatives and other members of the home.
How To Pay For Nursing Home Care
Sometimes, there is no alternative to nursing home care. You have to pay for it. You don’t have any choice. Elderly relatives require around-the-clock assistance that you can’t provide.
Fortunately, there are some strategies that you can use to make it more affordable.
Invest In Long-Term Care Insurance
Conventional policies and Medicare don’t usually cover nursing home costs. That’s why it is so important to get long-term care insurance in advance. This protects you financially if anyone on the policy document needs to go into long-term care.
Before you sign up to any policy, you’ll need to do your homework. Find out whether there are any limits on the amount of care that you can access and what they mean. Check that it applies in older age, as that’s where a lot of people run into trouble.
Consider Assisted Living
You might want to consult with a medical professional to see whether assisted living is an option. Here, the elderly relative stays in their home and hires care workers who travel to their address to help them with daily tasks.
Assisted living is generally cheaper because there is no need to pay for accommodation. Living in the original address also eliminates the need for fees to cover other overheads. Generally, it works out cheaper, particularly if the elderly relative isn’t experiencing any complex health conditions.
While nursing homes will often charge upfront rates, you can still negotiate. In some cases, they are just following industry standards, copying their competitors’ pricing models.
You improve your negotiating position when it comes to long-term care costs. You’ll still have to spend a lot of money, but a lot of institutions will offer reduced fees if there is a good chance that you will remain with them for a long time.
Remember, care homes don’t want high vacancy rates. Patients who stay with them long-term are often the most lucrative – particularly those who remain three years or more. If you can make the case that this is likely to happen, they may offer you money off upfront. Seek the best hourly or daily rate you can.