The Cost of Care
Oct 27, 2015
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For those individuals 75+, the remaining mortgage amount as a percentage of the value of the home is low, usually less than 10%. In other words, if their house is valued at $100,000, they typically will owe less than $10,000 on it and have a 90% equity in it. That translates as $90,000 saved in their house. (Source: Capital Research Associates analysis of 1995 Survey of Income and Program Participation data) How long might that $90,000 last in a care community like assisted living or a nursing home?
According to a most recent survey by Genworth, the average licensed Homemaker Service Provider makes $18/hour, which translates to $4,860 per month for a nine hour day while the children are at work. Home Health Aides are slightly higher at $19/hour. Adult Day Care averages $60/day or $1800/month, then theres the drop off, pick up and caring for the parent at home. The average assisted living rate is $3200/month, with the added benefit of being 24/7 care with a full complement of services such as meals, activities, assistance with bathing, dressing and security. Nursing homes, typically end of life care, in a semi-private setting cost nearly $6000, and a private room averages about $6400 (Source: CareScout has conducted the Genworth Cost of Care Survey annually since 2004. Located in Waltham, Massachusetts, CareScout has specialized in helping families find long term care providers nationwide since 1997.)
So, lets look at the $90,000 that might be available to meet these costs. Under the Homemaker and Home Health scenarios, factoring in there will be income to supplement the home equity, the parents money will last two years. In the Adult Day Care scenario, the money will last about four years. In assisted living the money would last approximately three years. In the nursing home the money would last about one and a half years.
In all instances, spend downs do happen, and the care security that comes from Medicaid becomes very important. As a society, it is important that we support Medicaid funding to address those situations when our parents outlive their money.
Editors Note: This article was submitted by Robin Avery.
Mr. Avery is a Colorado operator of with The Retreat Communities and may be reached at 303-847-2233 or by email at ravy2003@msn.com. For more information visit The Retreat Communities on the web at: www.theretreatcommunities.com.
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