Long Term Care In The News

Yesterday’s Wall Street Journal had some interesting statistics on labor growth predicted for the next decade.  The article stated that 95% of new jobs would be in the service sector.

Previous articles have noted that the fastest growing service profession is caregiving.  Earlier this year the New York Times estimated that by 2020 (four years from now) there will be more people working in caregiving than work in retail.

Where are all those low wage workers going to come from? And speaking of low wages, the minimum wage is increasing, in many locales doubling to $15 per hour.  Since most Long Term Care (LTC) is minimum wage labor, what will this do to the cost of such care?

Currently $3000 a month is the base cost at many assisted living facilities, assuming you really do not need any help.  A median cost is $4500 a month and dementia often goes for $6000 a month.  Nursing homes often are $10,000 a month.  Costs have been increasing at a rate of over 5% per year (the past 8 years of recession excepted).  Now with interest rates having risen, inflation will increase, and minimum wage earners will be demanding higher wages.

How many of you can afford to pay for LTC for very long out of your current savings when your health changes?  Many people tell me they plan to die in their sleep, a noble hope, but not likely to work out for you.  Can your children leave their jobs, children, homes to come care for you?  I doubt it.

The baby boomers continue to pass through age 65 at 10,000 a day.  Some of them (like myself) have LTC insurance.  The facilities want people like me as they lose money on the low Medicaid reimbursement levels.  When there are enough people who can pay for their LTC because they purchased LTC insurance (or the few who are rich), the facilities will start declining to accept people on Medicaid.

I don’t want to think about the day when I can no longer properly care for myself either, but I know I will not become a burden on my children and will have ready access to the care I want, in a nice place I can afford.  I no longer stay at Motel 6, even if they do leave the light on for me.  I have become accustomed to nice surroundings and have little interest in changing.  If home care can work, my policy will pay for that too.

You know the day is coming, are you going to investigate what you can do for yourself, or ignore it until it happens?  You don’t need a lot of money to get LTC insurance.  Since the fall back option is to sell everything, including the house and your life insurance to go on Medicaid, you might use some of that house equity to get coverage so you can stay home if you want, to or stay in a nice place (not your children’s basement).

For more information visit www.TheLongTermCareGuy.com  You can email me questions at [email protected]

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