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The Cost Of Long-Term Care

Financial Symphony / John Stillman
The Truth Network Radio
August 22, 2018 6:00 am

The Cost Of Long-Term Care

Financial Symphony / John Stillman

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August 22, 2018 6:00 am

What's the true cost of long term care? Well, that depends on what kind of care you need.

Matt Ayotte and Alan Millikan, founders of Aegis Home Care, came by the studio to talk about different types of care and just how much each one can cost.

Click the link for more in-depth reading in a recent blog post:



Welcome. It is Mr. Stillman's opus John Stillman alongside a couple of special guests and special guests who have been here before. Matt and Alan Milliken of the founders of ages, home care, you find them it's a GIS home guys with a lot of repeat guests on this year show so congratulations on getting the call back. That's big time stuff. I hope your where the drawing.

So we talked before the previous episode about the four misconceptions of aging and healthcare were talking today about what it really costs to have some kind of long-term care needs will start the most expensive and get to the boat more affordable. To the extent that any of these options are affordable. I will cannot work our way down to the different less expensive options are, but first Matt I know you've got a couple resources that you would recommend for folks to sorta check out what cost look like for different things in this space you and think strong two things when we were chatting before the show that I did want to make sure that folks were aware of because I use them all the time and have for 20+ years. The North Carolina ship program.

It's SH I IP it's the seniors health insurance information program.

It's run through the North Carolina Department of Insurance and it literally is WW W in C ship like a ship but with two it's just an incredible resource for understanding Medicare.

Medicare options the new not just what your benefits are for part a and part B and how those change each year with the varying deductibles and so forth. Going up and up, but it's a great resource to be able to look at your County specifically and determine what licensed med sup Medicare supplemental policies or Medigap as it sometimes call policies are available to you out there and also to look at Medicare advantage plans which can be a little tricky in tricky to understand tricky to understand the distinctions between them, but the inmate PD the Medicare advantage part D programs are all outlined out there, it's just they got an 800 number. They have a really well-trained group of folks that are glad to take phone calls and glad to answer questions. The other thing that I'd mention I use all time is the Genworth financial not associated with Genworth in any way but there's a/cost of care and their cost to cure models are really really good and actually really accurate. The only tricky part is our part of the state can be sometimes more expensive than the western part of the state or down East so sometimes you may see something being quoted as hundred and $10 a day and in our area. Alan IRC and hundred and 2530 a day. Sometimes you have to counter mentally build that in that they do give you the ability to slide the scale specifically up a number of years so that you can find out what it's costing today and what the annual growth expectation is for that particular service in 2027 or 2032 or whenever you think you might need it sometimes can help with budgeting for long-term care when you talk about the future because there are basically two things in our economy that are growing in price more rapidly than inflation. One of them is college tuition. The other is the price of long-term care so certainly something you would be factoring into your plans up on that note let's talk about the different ways of caring for yourself as you get older and sort of the cost expectations for each of those to your soul started what is essentially the most expensive of the CCR sees the continuing care retirement communities you probably paying a deposit early on. You may or may not own your unit that you stand or you might display a really high rent. But the idea is you're taking care of for life no matter what your needs are medically self gives an idea of what it might cost to move into a place like that.

An initial deposit. What does it cost for a unit.

What do the monthly cost look like said I just got a call yesterday. John from a family looking at options like this and they said hey can I go to X CCR C next door to us. You know I can move in their right and I said well I guess you can. And there's two ways he can get you can get in there one is you have to be independent to move into those places initially so you really can't have any physical needs or cognitive needs to move into one of these places and is initially you have to be independent, so if that's the case, then certainly you can go in there, but you also have to have some money and typically the cost of getting into a C CRC can range anywhere from a one-bedroom apartment which is in the 130 to 150 range 130,200 50,000 range up to in the 500s if you want three bedroom villa that's fully sorta decked out in the latest marble and granite and hardwood so they're super nice and I as we talked about before on a previous podcast. There are some equity models where you don't lose that money. It's an investment of sorts, and you are guaranteed help for life on that campus, but it can be quite expensive. Not only do you have that initial fee of the hundred 50 to 500. But there's also monthly fee and it's all usually tied to your sweater, square footage, how big is your unit.

So if you have a 1500 square-foot unit. It will be one price that could be $2500-$3000 a month all the way to $35-$4000 a month. If you have a bigger unit you off-site also pay more if you have that your couple moving into one of these places on on a monthly basis and in some of those cases you own your unit when you pass away your kids inherited. It can be sold. They get the equity correct.

I in some cases I know, sorta like shared equity with the community.

Rightly, however much the unit grows from the time you buy the community gets part of that growth, you get part of it.

Some of them as we said you'll and the unit at all yet. And this is Matt the one quick thing I would add to what Alan said you know what you're doing John in terms of helping people do advance financial planning for long-term care can't be overstated enough help people unfortunately really do need to address this sooner than later. A lot of the phone calls that we get and it's always it's tricky for us because our hearts go out to these folks and their they eat, sometimes even have the money and there there ready to move in. There is a waiting list at one of the large CCR sees in our area.

That's over 500 people there waiting lists where they're going to be building a new stage, but it's not can be ready until 2022. That everything so it's it's not sometimes just a matter of sign 150,000 what I could do that I could deal with that. The fact is you have to get on the waiting list and it might be three, four, five years before your you get the phone call and is Alan said that now the tricky part of that is things can change very drastically and through for five years so you might have well qualified for it from a clinical perspective not to be not overly clinical but you might not of had any cognitive impairments or anything, but five years from now they you might not be a good candidate to live on that campus so checking this out much sooner than later and thinking about these things. It's all part of having an advanced plan so that's kind of the highest in the CCR see next tier probably not as glamorous but also very expensive would be the nursing home so give us an idea on cost on that front, said nursing home costs. Like Matt said earlier the early part of those stays can be covered by Medicare at that site qualified stay in hospital and you have a diagnosis that says sure Medicare is gonna pay for part of that. If that's not there or if it runs out because at some point, Medicare will pay anymore than the average cost is somewhere in the neighborhood of $225 for semiprivate room and $250 for a private room.

At that can be higher in our area is just the way it is in the triangle. Unfortunately, that can be higher up to 303 25 a day depending on which which nursing home you look at and what you get. There is wife where care with around-the-clock nurses and certified nursing assistants and aides and dietary help and food, and you'll have to pay for any utilities. I mean if you lived there then you're getting everything including transportation to and from doctors promise those kinds of things but it's it's like you mentioned, it can be a small room and might have a roommate so pretty high cost there. Then we have assisted living where the care is not as strenuous but you are still there 24 hours a day. It's just that the level of care needed to be provided to using is quite as you know the right work that isn't quite as intense. I guess, but I met Woody, some of those costs look like new. Comparing nursing home to assisted living. You're right.

And it's not it's not as robust.

This service offering isn't as robust and the cost art as as high either.

The easiest way I'd I generally think of it, it's about half off. So in this area instead of being in the 250 even 275+ dollar a day range for nursing home.

You could be looking in the hundred and $2540 a day range annualized which is how I always think of things nursing home right now in the in our area. If is something in the neighborhood of $90,000 a year which catches people a bit off guard say the least I might mentioned earlier that cost of care website on the Genworth site of I was looking at this yesterday and scaled it up 10 years just to see what they were predicting for 2027. So let's say you're 72 today or 67 in your thinking about what what what could that be 10 years from now that that prices can be up to almost $125,000 a year on assisted living is roughly half of that right now it's in the low 40s which is still considerable chunk of change. 40+ thousand dollars year.

But it's can be up in the mid 50s maybe even $60,000 in 10 years. Another option that a lot of people look at where maybe it's just care needed during the day is adult daycare and I know this can kinda work hand-in-hand with some of the home can do but looking only at adult day care by itself become a cost would be be looking at their and also what happens. Atwood gives a hunt in the lake so it's it's it's a term that you might hear more often now. Then use to everybody's heard of daycare for their children, but adult day care is similar but different. It typically is someone who may be in a spousal situation where the wife is perfectly fine and working full time and something happens with her husband. He might've had a stroke he might've had early onset dementia and she still needs to work and she can't really afford 24 hour care.

So what are my options. So one of the options is as we mentioned, adult daycare so you can take your spouse she could take her husband to one. One of these facilities and he can be there during the day.

They do meals. They help with cognitive issues. They do activities there's music, there's a whole plethora of things that the actually the state requires that they have been an adult daycare situation and they can stay there from 8 to 5 Monday through Friday.

They typically aren't open on weekends or holidays, but it does help bridge a gap between know when someone is just not old enough or not ready or not financially able to retire and take care of their spouse. This is an option as you said someone like us as an agency can help on either end of that day. We can help in the morning, get somebody up, get ready take him to the daycare pick him up in the evening to come home. Help them with the meal getting ready for bed so that the day ends up needing to be longer for these folks them.

We can help on either end of that the cost of an daycare situation typically runs about $9200 a day and then looking at home care which obviously can be very flexible. You can have somebody in the home 24 hours a day helping you with tasks around the house.

It could be that you just need help.

A few hours a day, but just to give us a general idea of hourly rates on something like that. And again, I know we talked about having a CNA, a certified nursing assistant is what you guys are providing for home care so there is the capability to help with some medical stuff, although I know primarily what you're doing is helping with meals, transferring from one into another things like that but what can I constantly looking at and in one other quick note. You are correct answer would sit, meal preparation, and assistance with ambulation, assistance with general hygiene. A lot of times the CNA's well we actually train them and encourage them to look around and keep the home environment safe.

First and foremost, that's what they need to do so even light-duty housekeeping. Your you're there in the home with the load of laundry, keep the kitchen clean all go through and look in the refrigerator for you.

No expired foods and that type of thing so it's a little bit sometimes little bit more than than just companion care and that kind of thing the cost ranges from generally speaking, 22 sometimes almost $30 an hour but it's it's kind of it's counterintuitive.

So the longer the shift that you might need at any given time. The blessedness per hour. So if you were to need eight or 10 or 12 hours or round-the-clock care.

It's can be back down towards the $20 range and the absolute Frank honest truth on that is, it's just much much easier. Administratively for us to staff that we have many many many CNA's, we have almost 175 CNA's currently that they love the long shifts and they would rather drive somewhere be there 10 hours and drive home if you need only two or three hours. The price goes up per hour because it's it's still the same preparation in the same drive and it's sometimes much, much, much more difficult to actually find somebody willing to do that, but the flexibility in working with an agency, not just ours, but any home any licensed home care agency through the Department of Health and Human Services is that there is backup that's really important concept. The people unfortunately forget and don't think about. We we work with a lot of families that started by finding Mary or Nancy on Craigslist and they stayed with mom for a year and it was great and then Mary got the flu and was out for a month and you did want her around her mom anyway with the flu but there is no backup. There was nothing nothing there.

It is a safety net, and agencies are always going to be able to have another person at the ready with the nurse to be able to to help them understand the needs of her mom, and you can see how combining something like adult daycare for part of the day with home care for the other part of the day could be much less expensive way of caring for somebody than just having a good nursing home and they get to stay in their home which is a big thing for a lot of people were often referred to as a bridge and will get a call from someone who says mom just not ready to move into assisted living or dead, or husband and we say sure in a week and we want them to stay home to. That's where they want to be so you know we can do anywhere from 34 hours a day to do whatever you need in and not only on their four hours, but Wendy won't. There's three or four hours.

Do you want them 6 AM to 10 AM Marty 11 to 4. That's the beauty of home care you can provide that and give people exactly what they want when they want it and nothing more, nothing less. And it is a bridge to the next level. We we know that people will change and will need things more than maybe what we can provide down the road, but it is a bridge to the next level and so then the question becomes how do we pay for all of this and that's a completely different discussion for another day.

But we've actually done a couple podcasts in the past that all of the different insurance options, long-term care insurance, life insurance with what's called an accelerated death benefit living benefit were essential.

You can use your death benefit to pay for your care while you still live there are asset-based long-term care options where you can essentially convert your IRA into an insurance policy.

And yes, you paying taxes on that as you converted over but you can stretch that out ever baby tenure. Cementing a huge tax hit in any one year.

There are ways that you can self-insure. If you have the assets. Maybe you have a lake house is worth $1 million that you say are it will once I end up in the nursing home work needs of Medicare can leave the lake house, possibly cows. At that point and I will go a long way in covering market. There are ways you can do it, but it it's just something we have to plan for and we have to figure out what's going to be right for your situation again.

Matt Ayotte and Alan Milliken are the founders of Aegis home care you find them online.

It Aegis home EEG IIS home you guys the phone number once again is what 919-442-5252. That's if you'd like some help. Or maybe more realistically, somebody in your family need some help in you'd like to explore their resources there. Thanks guys for company and enjoyed talking with you will talk to you again soon. Right here was the beer.

Thanks for having us. Mr. Stillman's opus

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