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Nursing home care costs fly away. For a private room in a nursing home, the average person spends nearly $10,000 a month — and nearly $120,000 a year — and those costs are only expected to increase in the coming years.
With the average cost of nursing homes being twice the average salary in the United States, that’s more than many seniors can comfortably afford. And for those who can, it can quickly deplete their Pension saving or the estate they plan to leave to their heirs.
Fortunately, there are a few strategies that can help reduce nursing home costs and increase those costs further.
Learn more about your long-term care policy options now.
How to Cut Nursing Home Costs, According to Experts
If you need or want to reduce the costs of nursing home care, here’s what experts say you can do.
Take out long-term care insurance
One option to reduce these types of costs is to purchase a long term care insurance policy. These types of policies can help cover retirement home costs And other necessary long-term care services. These can be standalone or hybrid policies, combining life insurance and long-term care coverage.
“The most common plans sold today cover nursing homes, assisted living facilities, adult day care, and in-home care,” says Mark Baron, owner of Baron Long-term Care Planning.
You can buy long-term care insurance at almost any age, but Baron says most people pull the trigger in their 50s. However, if you can buy sooner, it might make sense to do so. These policies require medical underwriting, so the healthier you are, the more affordable your premiums will generally be.
“Principaling a policy earlier allows individuals to benefit from lower premiums and ensure coverage, especially for those who have a family history of chronic illness or a higher risk of needing long-term care services “, explains Logan DuBose, doctor and co-founder of Olera, a support platform for elderly care.
Find out how affordable long-term care insurance can be here.
Consider a shared room
Another option is to share a room in the nursing home rather than choosing a private room. According to a study by Genworth Insurance, opting for a semi-private room in a nursing home can save you approximately $1,064 per month and $12,768 per year compared to a private room.
“The costs are lower,” says Neal Shah, founder of CareYaya, a platform that connects older adults with caregivers in their area. “Plus, companionship can improve well-being.”
And it’s true: Studies show that living with a roommate can lead to better sleep, less anxiety, and an even healthier diet.
Explore nursing home alternatives and community programs
You can also turn to alternative care solutions. Having a member of the family Managing your care may be ideal in some cases, but if that’s not possible, turn to community groups who can give you a helping hand.
“Take advantage of community organizations, faith groups and local agencies that offer support services to seniors and caregivers at a reduced or no cost,” says DuBose. “The best place to start is with your local Area Agency on Aging, which is a group that specializes in resources for people in need of senior care.”
Hiring a home caregiver may also be an option. Genworth data shows these costs range between $5,720 and $6,292 per month, reducing your potential costs by thousands of dollars. Assisted living facilities may also be an option and cost on average between just over $2,000 and $5,350 per month.
Leveraging Medicaid
For those with low incomes, Medicaid can help cover the costs of care in a retirement home. And if you earn too much for Medicaid, you may be able to qualify using the “spend down” method, which requires you to use a certain amount of your assets each year to fund medical expenses.
“If a nursing home is unavoidable, determining whether your loved one will qualify for Medicaid or receive private pay will be critical,” says Chris Plance, health care consultant at PA Consulting. “Medicaid eligibility is based on a level of income and assets below the poverty line, which for many families will involve a very specific cost reduction process to qualify.”
If you think you might exceed the Medicaid threshold, talk to a financial professional about what your spending reduction strategy would look like. They can help you plan for these costs well in advance and ensure your eligibility.
The essential
With the costs of nursing home care rising, it’s never too early to start planning for your long-term care needs. If you’re not sure where to start, talk to an insurance agent about your options. They can explain the costs of a possible long-term care insurance policy or a hybrid life insurance policy that can help you. You should also shop for your long term care insurance company to ensure you get the best coverage and rate possible.
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