Now that you have gained an understanding of what Long-Term Care is, you are probably wondering just how much does this type of care cost?  Reality Check 2002 provides details of current costs and gives you estimations of how much it is projected to cost in the future.

 

REALITY CHECK 2002

The average monthly costs of Nursing Home Care (NH) in Colorado:

 

    1992

    1992

   2002

      2002

 

Semi-Private:

 

$76

 

$2,312

 

$140

 

$4,258

         

Private:

 

$91

 

$2,730

 

$160

 

$4,866

 

The average monthly cost of an Assisted Living Facility (ALF) in Colorado:

 

 

1992

 

2002

 

2002

         

Assisted Living:

 

Did Not Exist

 

$120

 

$3,650

 

Since 1990, the average cost of Long Term Care in Colorado has increased 6% per year.  [1] The average length of long-term care stay is almost three (3) years with over 20% needing care longer than five (5) years.

 

Long Term Care Projections:

Assisted Living (ALF)

 (Private)

Nursing Home (NH)

 (Semi-Private)

 

Daily

 

Monthly

 

Annually

 

Daily

 

Monthly

 

Annually

 

Present costs:

 

$120

 

$3,650

 

$43,800

 

$140

 

$4,258

 

$51,100

 

In 10 years:

 

$195

 

$5,931

 

$71,175

 

$228

 

$6,935

 

$83,220

 

In 20 years:

 

$318

 

$9,672

 

$116,070

 

$371

 

$11,284

 

$135,415

 

In 30 years:

 

$519

 

$15,786

 

$189,435

 

$605

 

$18,402

 

$220,825

 

If required, can you easily liquidate your assets? 

If you needed Long-Term Care today what is the first $44,000 asset you would liquidate?

 

Projected Costs: (annual costs)

 

 

ALF- 3 Years

(Private Room)

ALF – 5 Years

(Private Room)

NH – 3 Years

(Semi-Private)

NH – 5 Years

(Semi-Private)

Present costs:

$131,400

$219,000

$153,300

$255,500

In 10 Years:

$213,525

$355,875

$249,660

$416,100

In 20 Years:

$348,210

$580,350

$406,245

$677,075

In 30 Years:

$568,305

$947,175

$662,475

  $1,104,125

 


[1] Source:  New England Journal of Medicine

 

Its obvious given our current inflation of health care costs that these figures are daunting and could put a serious dent in our retirement savings. What can be done?

1. You can self insure or pay for it as you need the care.

2. Buy Long-Term Care insurance.

3. Co-insure.

In the next two sections, I remind you of the limitations of Medicare and Medicaid as it relates to Long-Term Care costs.