Expenses of Long-Term Care

Long-term health care services will deplete your assets quickly. Sudipto Banerjee of the Employee Benefit Research Institute performed a study (EBRI Study) that looked at short ad longer-term nursing home stays. Medicare usually pays for the first 20 days and for some of 80 more days if the patient is undergoing rehabilitation. However, Medicare does not pay for long-term care in a nursing home.

The EBRI study found that those who spend six months in a nursing home end up effectively broke – losing home equity and financial assets alike. Currently, only 14% of nursing home residents have private, long-term care insurance.

The EBRI study also found that those who never enter a nursing home have more assets than those who do – median numbers are $174,000 versus $102,000. Long-term care ends up being over $200 per day, and families are not prepared to pay that expense. The EBRI study shows the consequences of that unpreparedness.

See Howard Gleckman, A Nursing Home Stay Can Ruin Your Finances, Forbes, June 22, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.