$10,000 – $12,000? That’s for a Year, Right?

Shocked senior gentleman looking at his bills in disbelief seated in an armchair isolated on white background

Q. I read in one of your recent newsletters that nursing homes in the metro DC area cost $10,000 – $12,000 a month. I think you made a typo, and I wanted to bring it to your attention. Those amounts are for a year, right? If nursing homes cost THAT MUCH per month, then nobody could afford them without going completely broke.

My used car cost $12,000, and I am paying it off. I couldn’t imagine spending that amount each month for my wife to have skilled care in a nursing home. In less than a year, that would deplete all the money we worked so hard for all these years, and saved for retirement. Please tell me I’m right, and the word “month” should have been “year”!

A. Thanks for your inquiry but, unfortunately, you read that right. The cost of a nursing home in the metro DC area is $10,000- $12,000 A MONTH, an amount that is catastrophic for most of us.

Each few years, Genworth conducts surveys of long-term care across the U.S. and summarizes the data in a Cost of Care Study, in an effort to help Americans plan for the potential cost based on their preferred location and setting. The 2016 survey is now out, and provides state-specific cost of care data for all 50 states and comparison to the national median.

Unfortunately, according to the study’s findings, the cost of receiving care continues to rise sharply year over year, especially for services in the home, where most Americans prefer to receive long-term care. Below are some highlights from the survey:

  • Home Care Costs Rise Sharply: Nationally, the median monthly costs Home Health Aide Services is $20 per hour.  For 56 hours a week (8 hours a day), that equates to roughly $4,853 per month, a 2.56% increase from last year.
  • Assisted Living Facilities Saw a Slight Increase:   Nationally, the median cost of assisted living rose .78% to $3,628 per month. In the DC Metro area, Assisted Living costs an average of $6,700 per month ($80,400) per year.
  • Cost for Semi-Private Rooms Increased: Nationally, the median cost of a semi-private nursing home room is up 2.27% to $6,844 per month. In the DC Metro area, the average cost is $10,114 per month.  That’s $121,363 per year on average!
  • Cost for Private Nursing Home Rooms Increased: Nationally, the median cost of a private nursing home room is $7,698, up 1.24% from 2015.  In the DC Metro Area, on average, the cost is $11,422 per month, or  $137,058 a year!

For the full report, see Genworth’s Website, and/or download Genworth’s Cost of Care App from iTunes.

People Underestimate the Cost of Long-Term Care

According to a complementary Genworth online caregiving survey, four out of five adults underestimate the costs of home healthcare. In fact, nearly one-third of Americans incorrectly believe that costs for these services run under $417 per month. As you can see from the figures above, people are way off, as the national median rate is nearly ten times more than that.

In addition, people who stand to be affected most by long term care events are also more likely to underestimate the cost of care. This includes women (who are statistically more likely to enter caregiving roles), single adults (who may not have a partner to rely on for caregiving needs), and younger adults (aged 25-45, who are more likely to deal with the reality of a parent needing care).

“The data from our complementary study dramatically demonstrated the huge disparity between what consumers think costs are and what they actually are, which is why it’s so important for families to educate themselves about the costs and plan ahead for how they will pay for those costs before it’s too late,” said Tom McInerney, president and chief executive officer at Genworth.

Understanding and Funding Care Options

As costs continue to rise, consumers should educate themselves on long-term care and options to pay for it, as follows:

  • Long-Term Care Insurance: There’s definitely a benefit for some people in purchasing long-term care insurance. However, there are certain issues to consider before you buy, including the rising costs and how long-term care insurance interacts with Medicaid. Keep in mind, also, that there are dozens of long-term care asset protection strategies other than long-term care insurance. For more details, please read our blog post, “Long-Term Care Insurance: Yes or No?.”
  • Medicare does not pay a penny for long term care: It is important to understand that Medicare, the public health insurance system for seniors over 65 and disabled adults, does not pay one penny for long-term care. Medicare only pays for medical care delivered by doctors and hospitals and, in certain cases, short-term rehabilitation which might take place in a nursing home.
  • The Medicaid program is our country’s largest health and long-term care insurer, covering one in six Americans, including two-thirds of nursing home residents and one in five persons under 65 with chronic disabilities. Keep in mind, however, that Medicaid laws are the most complex and confusing laws in existence, and impossible to understand without highly experienced legal assistance. Without proper planning and legal advice from an experienced Elder Law Attorney, many people spend much more than they should on long-term care, and unnecessarily jeopardize their future care and well-being, as well as the security of their family. Please read the Medicaid Complexity page on our Website for more details.

A Helpful Resource to Have a Conversation with Loved Ones

Through its “Let’s Talk” online platform, Genworth offers a suite of tools and advice to assist families in beginning the planning discussion. This online resource provides tips on how to begin conversations surrounding long term care needs. Let’s Talk also addresses common misconceptions surrounding care and provides a step-by-step discussion guide alongside key issues to cover – cost of care being one of them.

Medicaid Planning in Virginia, DC, and Maryland

Medicaid planning can be started while you are still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if you are already in a nursing home or receiving other long-term care.  In fact, the majority of our Lifecare Planning and Medicaid Asset Protection Planning clients come to us when nursing home care is already in place or is imminent.

Generally, the earlier someone plans for long-term care needs, the better.  But it is never too late to begin your planning.

Planning for long-term care will not eliminate your risk or your husband’s risk of needing it, but it enables you to sort options and make smarter decisions ahead of time. As a result, you’ll have the peace of mind that no matter what happens, you will know what to do as a family.

As you have clearly not done any Long-Term Care Planning (and perhaps you’ve also neglected to do Incapacity Planning and Estate Planning), please call us as soon as possible to make an appointment for an initial consultation:

Fairfax Elder Law: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville Elder Law: 301-519-8041
DC Elder Law: 202-587-2797

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About Evan H Farr, CELA, CAP

Evan H. Farr is a 4-time Best-Selling author in the field of Elder Law and Estate Planning. In addition to being one of approximately 500 Certified Elder Law Attorneys in the Country, Evan is one of approximately 100 members of the Council of Advanced Practitioners of the National Academy of Elder Law Attorneys and is a Charter Member of the Academy of Special Needs Planners.

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