Estate planning can help address nursing home costs. Figures from a Bureau of Labor Statistics (BLS) report published recently showed that the growth in the price of nursing homes and adult care has been especially volatile this year, reports Kiplinger’s recent article entitled, “Nursing Home Costs Soared in July.”
The national average cost of nursing homes rarely declines. The cost declined for just five months in the last quarter century (the months between 1997 and 2022). Therefore, it’s surprising to see three months of decline in 2023 (April, May, and June). Nonetheless, the total 1.2% percent dip in those three months was more than offset by the 2.4% cost increase in July.
It’s hard to determine if the July price jump was an aberration or indicative of future price increases. This unusual volatility likely shows an industry struggling to regroup after the disruptions of the pandemic, which severely impacted nursing.
Nursing home and adult care is very expensive. Most people spend over $7,000 in out-of-pocket costs yearly.
This high cost is likely due to several factors, and the increased demand from a rapidly aging population, inflation and a shortage of qualified nurses top the list.
However, there is some good news: the U.S. Government plans to direct more funding to support the nursing workforce, though the effect of the program will take time to show up in the preparedness and availability of nurses.
For most active, middle-aged people, it’s hard to imagine that you might need significant nursing care one day. However, research shows that 70% of adults who survive to age 65 need at least some long-term support before they die, and 48% receive some paid care, according to a study by The Urban Institute.
The key is to pay attention to financial planning. A senior’s thoughtfulness will let her family move them to a high-quality nursing home and likely be covered financially for a long time.
Could your family say the same thing? Do you know the range of costs in your area?
For example, the typical annual cost of a nursing home ranges from $59,495 for a shared room in Louisiana to a yearly cost of $380,000 in parts of Alaska.
While Medicare may cover some expenses, partnering with a professional is wise to get your long-term care planning on the right track. Estate planning can help address nursing home costs. If you have children, you’ll be doing them an enormous favor. If you would like to learn more about elder care, please visit our previous posts.
Reference: Kiplinger (Aug. 16, 2023) “Nursing Home Costs Soared in July”
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