Many people are shocked when they learn about the high cost of long-term care. Unfortunately, the cost will only get more expensive over time. A 2016 report by PricewaterhouseCoopers estimates that long-term care costs will more than double by 2047.
So how expensive is long-term care? According to studies performed by genworth.com in 2019, the national median cost of a semi-private room in a nursing home in the United States is $7,513.00 per month, and $8,517.00 for a private room. Costs have also increased in Montana. The median cost of a semi-private room in Montana is now $7,459.00 while the median cost of a private room is $7,717.00. In Great Falls the cost is even higher, with median cost of a semi-private room now reported by Genworth to be $8,897.00, and the median cost of a private room reported to be $9,201.00, according to its 2019 survey.
A Genworth survey also found that Americans typically underestimate the cost of long-term care. That, coupled with the fact that most people do not have a sufficient amount of personal assets to cover the costs of long-term care, leave them woefully unprepared. However, long-term care can be made more affordable with careful financial and estate planning.
From a financial planning standpoint, strategies could include purchasing traditional long-term care insurance or life insurance which is combined with long-term care benefits through a long-term care rider. His and her policies, shared benefits and inflation protection are also possibilities to make long-term care costs more affordable, to name a few. The key is to purchase a policy when still healthy and the cost of such insurance is at its lowest. Talking to your insurance professional is the first step.
Next week we will discuss how estate planning may be able to help prepare for long-term care through the use of an irrevocable asset protection trust.
Updated: December 2019