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The High Cost of Long-Term Care


Northwestern Mutual just released its annual “Cost of Long-Term-Care study.” As you might imagine, the costs of long-term-care can vary, depending on which region of the country you live in and whether you hire an aide to help you at home or enter an assisted living facility or nursing home.

Northwestern, which sells long-term-care insurance, urges people to plan for these costs. “There is a 66% chance that someone over the age of 65 will require long-term care in their lives,” says the company, which surveyed over 2,000 home health care organizations, 2,000 assisted living facilities, and 2,000 nursing homes in November. Here’s how the current costs break-down:

1)  Home Healthcare: The average hourly rate for home health aides is $20.65 or $23.98, depending on whether the agency is certified.

  • The area with the highest hourly rate for certified home health aides was Sioux Falls, S.D., at a cost of $33 per hour.
  • New Orleans had the lowest hourly rate of $13 per hour.

2)  Assisted Living Facilities: Approximately 1 million Americans live in an assisted living facility. On average, it costs $3,372 per month for a private, single-occupancy room and $2,592 per month for a shared room.

  • The area with the most expensive average monthly rate for a private, single-occupancy unit is Bethesda, Md., at a cost of $6,618 per month.
  • Milwaukee is the cheapest, at $1,263 per month for a single room.

3)    Nursing Homes: Among the 2,000 nursing homes Northwestern surveyed, the average rate for a private room is $246 per day, or $89,812 per year. Citing the U.S. Department of Health & Human Services, the company says the average length of stay in a nursing home is 2.4 years.

  • Anchorage, Alaska has the most expensive daily rate for a private room, at $526 per day.
  • The cost is lowest in Corpus Christi, Texas, at $133 per day.

Northwestern, which also offers a Lifespan Calculator and Long-Term Care Cost Calculator, says the data does not include expenses associated with medical equipment, transportation, and drugs.


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    • From LinkedIn Groups:I was not at the convention but would like to ircenjett after practicing as a long term care administrator since 1985. Long Term Care facilities have and always will be the Red Headed Stepchild of the healthcare continuum. Sad but true most of the dedicated employees are woefully underpaid and overworked. Many of these care givers are stuck in an endless cycle of a sector of healthcare that has always gotten the short end of the stick in funding. There is far more abuse of reimbursement in the home care sector than there ever will be in long term care since it is far more difficult to regulate thousands of home health agencies. Dollar for dollar long term care is still the best bang for the buck when you consider all the services provided in a 24 hour period.Posted by David

    • Most people overestimate the cost of a good long-term care policy. A healthy, married couple in their mid/late fifties, can share a policy that starts off with over a half million in benefits for about $100 per month per spouse.
      There’s a new type of government-approved long-term care policy that can protect your assets from Medicaid even after the policy runs out of benefits. Here’s an explanation of how these policies work:


    • I truly don’t mean to sound insensitive with my response. The bottom line is that you either provide the care for your loved ones, or someone else will have to. These places are not a vending machine that sucks cash from a pocket. They are the care providers, and payment for the care is called a “bill”. End of life issues suck. If anyone thinks it is hard and tough to watch your loved one slowly slip away from you while under the care of a facility, well, try being the 24/7 caregiver yourself. I’m sorry for your loss, but try not to blame others for something that is inevitable for us all.

    • I am sorry for your loss. Now your mom doesn’t have to suffer in this facility anymore. It is true in 2012 these places are a place of horror. Furthermore, You are left with only a few options before you have to go to the hospice. Take the time people to find a place before you have to go.

    • My Mother pass away and was in assisted living for 3 years.. My experience was one of disgust as to how this facility which was a chain sucked every last penney she had out of her meager estate.. They nickled and dimed her at every chance they could.. My Mother had money stolen out of her wallet I am assuming by the help the last 6 months of her life.. I could not prove this but the help watches the people who live in these facilities and since most are low paid that work in places like this they take money etc.. from residences..How low… Theyt say someone moves into a facility like this and they live for three years.. My Mother rest her soul lived in there or 3 yrs and one month.. It broke my heart to see her decline… Please be set for heart ache when a loved one goes into a facility like this.. All the residences are money to feed the bottom line of a corporation that owns most of them.

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  • 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.