Where Does Long Term Care Cost the Most?
With more and more Boomers entering retirement every day, the cost of retirement is a common topic. One cost in particular is gaining more momentum in discussion because of just how expensive it is and how few people are prepared for the high price: long term care.
Long Term Care in the US
Long term care is a cost that an estimated 7 in 10 seniors in the United States will have to address at some point in their lives. Nursing homes, assisted living facilities, at home, and adult day cares are where long term care is most frequently provided and the majority of recipients are above the age of 65. Planning for this type of care during retirement is vital to securing your retirement income and making sure you don’t outlive your savings. New York Life recently released the results of a study that looked at long term care costs across the nation to help consumers become more aware of how much care costs in their area and how they can prepare.
According to a study conducted for New York Life’s Long Term Care Operations, the average annual cost of nursing home care in the United States is $95,706, up 20% from 79,935 in 2009. That same study revealed the 25 most expensive long term care markets in the country. Seattle, San Diego, and Sacramento have moved up the most spots on the list in the past 5 years, while other markets like San Jose, Boise, and Detroit only just joined the list of costliest markets. The areas with the most expensive long term care markets are mainly those in the Northeast and on the West coast, but there are some outliers, as well.
Where is it Most Expensive?
The most expensive market for long term care is in the Bridgeport-Stamford-Norwalk area of Connecticut. The average cost of a room in a nursing home there has reached $159,359 for just one year. Anchorage, Alaska comes in at the second spot on the list, with an average annual nursing home cost of $156,950. The third most expensive long term care market in the US is the New York-North New Jersey-Long Island area of New York and New Jersey, where a room in a nursing home costs an average of $155,180 for a year.
“The staggering cost of nursing home care tells only part of the story,” said Craig DeSanto, senior vice president of New York Life, in a press release. “Today, about 50 percent of long-term care insurance claims begin with home care, which speaks to the preference many Americans have to receiving care at home. So the true cost of a long-term care event can be the cost of home care, time spent in an assisted living facility, and then a possible stay in a nursing home. The combined cost of that care can easily eliminate a family’s entire savings,” he said.
Other markets that made the list include Boston, which ranked at number 6. The average cost of nursing home care in Boston is $146,372. Philadelphia came in at number 11, with an average nursing home cost of $129,239 annually. DC-Baltimore area fell at number 16, with a year of nursing home care costing an average of $120,709. Miami-Fort Lauderdale was ranked number 21, with an average annual cost of $116,931. The Portland-Salem area came in at number 25, with a year in a nursing home costing an average of $111,909.
Making Preparations in 2015
These markets are spread across the country, so it pays to look into the details and find out just how much care costs in your area. Failing to educate yourself about the growing cost of long term care can have seriously negative effects of your nest egg later down the road. For those with assets to protect during retirement, Long Term Care Insurance can provide a solution to the high cost by allowing you to transfer the financial risk to the insurance company. The cost of an insurance policy is very little compared to the actual cost of care, so if you can afford the premiums, they are typically well worth the asset protection you will receive.
“It is important for Americans to consider that for about $160 a month**, long-term care insurance could help defray the cost of long-term care and provide the financing so families can choose their desired method of care,” DeSanto said. That estimate is based on an average 55-year-old applicant who purchases a 3 year benefit period with a 90 day elimination period and $200 a day in benefits.
Univita Health, the nation’s largest long-term care administrator, conducted the study. They contacted more than 2,500 long term care facilities including nursing homes, assisted living facilities, and home health care providers and received more than 10,000 completed surveys throughout the year of 2013.
Long term care is something that many Americans will have to face as they age. Planning ahead for the rising cost can make all the difference in the world when it comes to your retirement and how comfortably you are living. Read more about planning for long term care or if you would like to learn more about the cost of Long Term Care Insurance, request a free quote today.