You or a family member will likely need nursing home care or some type of long-term care at some point. Roughly 70% of people who reach the age of 65 will eventually need long-term care and 20% of these individuals will receive long-term care that exceeds five years. But can everyone afford the rising nursing home costs?
Nursing homes are long-term care facilities that house individuals with physical impairments, debilitating illnesses, or cognitive challenges that require skilled nursing care or those who need assistance with basic daily living activities. Approximately 960 facilities presently have certification from the Ohio Department of Health as nursing homes.
Unfortunately, Americans with lower incomes cannot afford the exorbitant cost of residing in a nursing home. Increasingly, a larger percentage of middle-income earners today find they lack the resources for covering the cost of nursing home care for more than a couple of years.
The result is that these individuals also find themselves reliant on Medicaid for their ongoing care.
Understanding Long-Term Care
Long-term care involves medical and non-medical assistance provided for those with an inability to complete some daily activities of living such as dressing or grooming. Although typically thought of as a service needed by older adults, individuals of any age may need long-term care support—such as those with disabilities.
People receive long-term care services and assistance in nursing homes, assisted living facilities, or in their homes or other community settings. Most private health insurance plans and Medicare either offer limited or no coverage for long-term care.
National Data Regarding Nursing Home Cost
Genworth Financial, a major insurance company, performed a Cost of Care study that showed nursing homes had an annual median cost for private rooms of $105,850 ($8,821 monthly) and semi-private rooms at $93,075 ($7,756 monthly). American Council on Aging’s study produced similar results with the national average daily nursing home cost for shared rooms at $260 (roughly $7,700 monthly).
Ohio Nursing Home Cost Comparison
State
Ohio
Indiana
Kentucky
Pennsylvania
West Virginia
Daily Average
$ 235
$ 235
$ 241
$ 330
$ 374
Monthly Average
$ 7,148
$ 7,133
$ 7,330
$ 10,038
$ 11,376
Annual Average
$ 85,775
$ 85,593
$ 87,965
$ 120,450
$ 136,510
Source: 2021 Average Nursing Home Costs
The chart comparing the nursing home cost by state shows that Ohio is among the most affordable.
Indicators Show Further Escalating Costs
The Penn Wharton Budget Model (PWBM) estimates that Medicaid’s overall long-term care expenses should continue rising by roughly 3% annually, which is in addition to the expected increase caused by inflation. While 3% appears as a reasonable increase, the tremendous rise in demand among baby boomers will translate to a very substantial overall annual expense.
What is driving the spike in nursing home care costs? A report in Skilled Nursing News attributes the rise to the continual costs associated with staffing these facilities such as for nurses and other care providers.
More specifically, the Centers for Medicare & Medicaid Services (CMS) is seeking new minimum standards for staffing, which should translate to further financial challenges for those operating these types of institutions.
What Services Are Included in Nursing Home Care?
The majority of residents residing in nursing homes require assistance with five daily living activities that include ambulating, bathing, dressing eating, and toileting. Ambulating or transferring involves moving a resident from some existing position to another. For example, leaving the bed and being seated in a wheelchair.
Other basic included services include assistance with medications and housekeeping. Unlike assisted living facilities, nursing homes must have qualified medical team members on hand 24 hours a day to provide supervision.
A skilled nursing home resident also may need services involving catheters, injections, and wound care.
Estimated Costs of Other Long-Term Care Settings
Adult daycare is another alternative for seniors, particularly for those residing with a family member. Here, the individual spends the day or part of a day in the care facility, often while an adult child is working during the week. Median monthly rates are approximately $1,600, which is typically paid out-of-pocket or by Medicaid.
Assisted living facilities house residents that generally need less intensive care compared to a skilled nursing facility. Costs for assisted living vary widely compared to nursing facilities; however, the national monthly median cost is approximately $8,800.
Memory Care Facilities or Units
Seniors with memory-related concerns are typically struggling with dementia. Although not a formal disease, dementia generally refers to cognitive impairments associated with thinking, remembering, or decision-making.
Alzheimer’s disease, the most common form of dementia, impacts more than 5 million Americans. Those with these types of conditions pose significant safety concerns and reside in either designated, standalone memory care facilities or specific units within a larger skilled or assisted living facility.
Heightened security and supervision methods are critical in these facilities because residents wander resulting from generalized confusion. Ohio is home to approximately 370 facilities specifically designated for this purpose, which have an average monthly cost of nearly $5,600—very similar to the national average
Medicare and Nursing Homes
Medicare and the majority of private health insurance options lack coverage for long-term care. However, Medicare will pay for the cost of skilled nursing care as part of a recovery program following a period of hospitalization.
For example, individuals exiting a hospital following a major surgical procedure often need skilled nursing care, which often occurs in a nursing home setting. Medicare typically pays 100% of the costs for the first 20 days and extends some partial coverage for up to 100 days.
Keep in mind that those with Medicare that reside in a long-term care setting may still rely on Medicare benefits for hospital stays, physician visits, and types of medical supplies.
Medicaid and Nursing Homes
Unlike Medicare, Medicaid will cover nursing home care and some other forms of long-term care. Medicaid is often described as a societal “safety net” for those with limited income and few assets.
In many cases, Medicaid may claim the home of a beneficiary as a means of recovering costs. Medicaid is a program with provisions that varies from state to state.
The Importance of Planning and Seeking Guidance From a Professional
While nursing home prices continue increasing, so does the complexity of navigating the long-term care landscape based on changes at the federal changes and state levels. Seniors and their loved ones should begin discussing these issues long before the need arises.
Ohioans may benefit from speaking with professionals such as experts in the realm of Medicaid planning, asset protection, and “aging in place.” These specialists will assist with identifying your goals, assessing your unique set of circumstances, and creating a proactive strategy.
