Genworth Financial has published an annual survey of long term care costs for the past 10 years. The survey attempts to determine the true cost of long term care costs, not just the monetary costs of care but the entire toll for care recipients, primary and secondary caregivers and the community.
The largest recipients of care (34 percent) tend to be mothers receiving care from their children. That’s likely a result of women’s longer life spans and that men tend to have spousal care as a result of it. Illness and age-related frailty made up 87 percent of the reason care was needed (dementia, by contrast, made up 23 percent). Care recipients experienced increased stress with their spouse and with their children. One likely reason for the stress is the financial impact from their care. More than half the people in the survey reported that they were forced to cut back on other expenses and that their long term care costs reduced their savings significantly (an average of 61 percent). Nearly 90 percent of the recipients found that their household income was reduced by more than a third.
You might think that the impact was so sharp because these people simply didn’t plan for long term care needs and while 49 percent agreed that they had not considered the possibility of needing long term care, the most likely reason for the impact is that nearly 30 percent needed care for three years or more. On this website, we write often about the costs of long term care and what we tend to mean are the costs associated with hiring an individual to provide care or the costs of placing someone in a facility to provide them with care but even if your loved one does not move, likely there will be other costs associated with their care such as the costs for home modifications such as ramps or grab bars or the cost to provide care while a caregiver is away or the lost income when instead of going to work, a caregiver is taking someone to an appointment.
As you can imagine, it’s very costly to be a caregiver. We know that as there are plenty of stories on just how expensive it is on either our time or our resources, to our job prospects and to our careers. It doesn’t matter whether you’re well off or whether you pinch pennies, caregiving will make you scramble. For instance, in 2008, the median annual rate for a private nursing home room was $67,525 but five short years later, the same care rose to $83,950, a 4.45 percent compound annual growth rate over that period. (You can see a table of annual costs in Washington state at the bottom of this article.) Caregivers report that they’ve dipped into savings accounts, taken out loans, sold possessions including their home and borrowed money to pay for costs associated with providing for a family member.
Americans tend to ad lib when it comes to the care puzzle. But this is one time when doing something by the seat of our pants costs us money. The Genworth survey estimates it costs around $11,000 annually in out of pocket expenses when we put off planning for long term care. On top of those costs, individuals in the survey indicated that when planning had been undertaken, family members experienced less stress.
If you’re thinking about the repercussions of being a caregiver, start by talking to a good elder law attorney and determine if it makes sense for you to get long term care insurance.
Median Annual Care Costs in 2013
5-Yr Annual Growth
|Home health aide
Adult Day Health Care
|Adult Day Health Care
Asisted Living Facility
|Private one bedroom
Nursing Home Care