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5 Tips for Negotiating Long-Term-Care Costs

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If you’re expecting to have to use long-term-care services for yourself or a loved one anytime soon, here’s a bit of good news: Three types of services that could help you stay at home, and postpone moving into an assisted-living facility or nursing home, cost the same this year as last year, according to a survey of long-term-care costs released today by Genworth Financial Inc., Richmond, Va., one of the country’s largest long-term-care insurers. Genworth has conducted a nationwide survey of such costs since 2004.

In-home services are important to understand, since families often pay for them out of pocket to postpone moving a loved one into institutional care. And even if you’re lucky enough to have long-term-care insurance that helps pay for home care, you can often make it stretch over a longer time period by shopping around for more affordable care.

Genworth grouped in-home services into three categories: Homemaker services, such as cooking and errand-running, for which the national median rate is $18 an hour; home-health-aide services, which is hands-on personal care including bathing and dressing, with a national median rate of $19 an hour; and adult day health care, which provides social and support services in a community-based setting, at a national median rate of $60 a day.

The financial picture is grimmer for institutional care. The national median monthly rate for a one-bedroom assisted-living unit is $3,261 – a 2.4% increase from last year. Such facilities typically provide hands-on personal care and medical care for those who cannot live by themselves but do not require the constant care provided by a nursing home. The national median daily rate for a semi-private (in other words, shared) room in a nursing home that provides skilled nursing care 24 hours a day is $193, a 5.7% increase from last year. And a private room costs $213 a day, up 5.1% from 2010.

It’s important to keep in mind that these costs range widely from place to place, even in different cities in the same state. Genworth has a map online of the costs by state and metro area at www.genworth.com/costofcare that can help you compare costs in various places – a particularly helpful feature for families trying to decide whether to move a loved one who needs extra care.

Matthew Sharpe, a Genworth senior vice president and long-term-care product manager, suggests using the financial data it has collected to negotiate care costs. “People don’t think twice about asking for a deal when checking into an apartment rental,” he says. “You should feel the same way when researching an assisted-living facility or a nursing home.”

Knowing the range of prices for various long-term-care services in a specific place “is a great way of empowering people,” he adds.

Here are some bargaining tips from Genworth that we found interesting:

  1. Assisted-living facilities often charge a one-time move-in fee. But if facilities have high vacancies, they may discount or waive the fee. They may also let you choose a more expensive room at a lower price.
  2. Home care agencies may lower their hourly rate for services that are easy to staff and long-term, such as a weekday schedule expected to last several months.
  3. A home-care agency with rates at the high end of the local range may lower them if it learns that you’re interviewing several agencies and cost is a factor you’re taking into consideration. Let it know if you’ve gotten a lower quote elsewhere.
  4. Agencies usually charge extra for weekend work. But if you also use significant weekday hours, you may be able to get that fee waived.
  5. Nursing homes generally don’t discount rates, which are influenced by why Medicare and Medicaid pay. But you may be able to negotiate for extra amenities, or a private-room upgrade, if paying out-of-pocket or with long-term-care insurance.

Have you or your family tried any of these tactics? Did they work? And how does the “median” rate for long-term care stack up against what you’re paying?

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    • Kelly, this is Kevin Skipper, we last talked about negotiating the price for my mom’s LTC. We did, then 90 days later they moved her to the Dementia Care Unit and raised the prices to $4,400 per month. I started shopping around the state to see if I could find the same level of care for less. I found the only “non-profit” assisted living facility in the state in Conway SC. A place called “Anderson Oaks”. I am moving mom there next week and lower her monthly bill to $3,000 per month. This non-profit would make a great story for you. Call me to discuss: 803-422-1988.

    • Great article, with some useful suggestions. I have also found that assisted living facilities will often waive the move-in fee, and that rates can be negotiable if you’ve found a lower rate at a comparable facility nearby. It’s always worthwhile to let them know you’ve been doing your homework.

      Thanks!

      Vera
      http://www.drmarionu.com/dm_ltci/dm_ltci.htm

    • Kelly:
      I am a financial advisor and also in Ed Slott Elite IRA group and have met you at his meetings. I have been involved in direct parent care with my mother for the past two years. In South Carolina I paid. $2,000 per month for Independenc Care from Jan. 2010 to May 2011. Bringing in Companion Care cost me $14 per hour for a total of $900 per month. I have recently had to move my mom to assisted living. That cost is $4,200 per month. The first priced it at $4,500 and I said, that is on the high side and they reduced to $4,200. Let me know if I can help with any other feed back. My cell is 803-422-1988.

    • good article!

About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.

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