How expensive is it?
According to the latest figures from Genworth, the annual cost of a private room in a nursing home is going to cost around $87,600. This would represent an increase of more than 4 percent (4.35) in just one year. Assuming that the costs do not increase (which seems unlikely given these statistics), a three-year stay would cost about $262,800. Semi-private homes are no bargains either, prices are up 2.62 percent compared to 2013 and stand at $77,380
Why it should matter to you
The reason that these figures are important is because if you yourself live to be older than 65 or have relatives that do, there is a 70 percent chance that you need some type of long-term care services. The U.S Department of Health and Human Services estimates that the number of Americans who need long-term support and care services are going to skyrocket from 12 million in 2010 to as much as 27 million by the time 2050 comes around.
The increase in private room costs
One of the reasons that the price of a private room increases as much as it does is because the private room allows the nursing home to be a bit more profitable. The semi-private rooms are often (partially) covered by Medicaid. So in order to help cover the costs of government reimbursement, the private rooms can be a bit more expensive. If people have the money necessary to pay for a private room, they will likely do so because of the added benefits.
Costs are dependent on where you live
The study also showed that when it comes to long-term care costs, where you live matters. There is a sizable regional variation. For example, in Alaska a private room in a nursing home costs upwards of $240,900, compare that to the $52,925 that a similar room costs in Oklahoma. The median rate for an assisted-living facility ($42,000) was exceeded in Washington, D.C, New Jersey, Massachusetts, Alaska, Delaware, and Connecticut
What it means for you
This means that just because care is more expensive in one specific part of the country, it does not necessarily mean that you would receive ‘better care’. When it comes to the quality of services provided and an area’s higher cost of care, there is no proven correlation.
What you can do right now
Those figures should inspire you to either star saving your money or invest in a long-term care insurance policy. According to the American Association for Long-Term Care Insurance, a couple at 60 years old would each receive $164,000 worth of protection and pay $3,840 a year for the insurance.
There is no denying that long-term care costs are high. However, you have the option to take proactive steps to ensure that they do not exhaust all the savings that you have. Make sure to educate yourself on the options available and become part of the 35 percent of Americans who are prepared for their future.
For laws related to Alaska nursing homes, look here.