One of the top stories in the elder law community of late has been the rising cost of long term care. This is a very complex matter because the playing field is changing as the costs are rising, and there are no easy answers. Let’s start by recapping the costs associated with long term care, which we have touched on previously in this space.
According to a MetLife market survey, in 2010 the national average charge for a day in a private room in a nursing home was $229; this factors out to over $83,500 per year, which represents a 4.8% increase over 2009 numbers. In the state of New Jersey the average is into the six figures.
The cost of a year in an assisted living facility rose by even more. In 2009 the charge for a year’s stay in an assisted living facility averaged $37,572 in the United States. In 2010 it was $39,516, and that is a 5.2% increase. Once again, these numbers are larger in the Garden State, where a year in an assisted living facility would set you back over $54,000 on average.
These costs are attention-getting at present, but if they continue to rise at about five percent every year for the next five, ten, or twenty years they may be truly suffocating by the time you need long term care. This is a challenge that can be addressed by the purchase of long term care insurance.
Long term care insurance is expensive in its own right, but you can get locked in at a lower rate if you obtain the coverage when you are in your forties or fifties. A person who is fifty-years-old may pay about $150 a month for coverage, while a sixty-year-old may be looking at a $250 monthly payment (these are broad estimates).
The suggestion here is to do some research on the matter and compare some quotes if you find that long term care insurance sounds like a viable solution given the specifics of your financial situation. The longer you wait before purchasing the coverage the more expensive it will be, and coverage is not going to be offered at all once you reach an advanced age.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.