Thursday, December 16, 2010

How expensive will nursing homes be in 2020?

The cost of growing old is a concept Baby Boomers are beginning to wrestle with as they contemplate long term care options for both themselves and their aging parents. But in today’s age of economic uncertainty and rising care costs, more dependent adults are relying on family members for care. The Wall Street Journal recently reported on a growing trend - compensating a relative to save money. In citing a report by the National Alliance for Caregiving and AARP, the WSJ pointed out that  more than 43 million Americans cared for a friend or relative age 50 or older in 2009. This number has increased by more than 27% since 2004! But this strategy can have drastic consequences that must not be ignored.

Genworth Financial has posted a tool to view median care costs by state, plus future projected costs. Below are some key figures for the Commonwealth of Virginia:

Type of Care - 2010 Median Cost/Year in Virginia - 2020 Projected Cost
Nursing Home Private Room - $73,000  - $118,909
Assisted Living Private Room - $43,182 - $70,339
Adult Day Health Care - $13,780 - $22,446
Home Health Aide - $41,184 - $67,084

If a family opts for relative-care, they must ensure that the relative can provide the assistance that is actually needed. Other important considerations include: Whether to pay the family member, how much to pay, and whether those facts should be disclosed to other family members. And of course, the person receiving the care should always be comfortable with their caretaker. The WSJ article referenced above suggests complete disclosure to the entire family, as a way to ease potential tension. Another important point – if Medicaid eligibility is a goal, there is no substitute to consulting an Elder Law Attorney. Medicaid laws may require a caregiver to be compensated in a specific way.  One common misconception is that Medicaid is only available for the poor. To the contrary, Medicaid is available to anyone who can legally qualify. An Elder Law Attorney should be consulted for Medicaid asset protection planning, because as this article alluded to above, there are nuanced and complicated qualification rules.



Image: renjith krishnan / FreeDigitalPhotos.net

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