Estimates health care costs for 66% of retirees

Apr 19, 2010 3 Replies
D

No recomendaions as to companies nor estimates, but here are some ballpark numbers to give some data. The study was done by the CCR, underwritten by Prudential.



"About one-third of individuals turning 65 in 2010 will need at least three months of nursing home care, 24 percent more than a year, and 9 percent more than five years.(1) In 2008, the annual cost of a nursing home was about $71,000 for a semi-private room and $79,000 for a private room.(2) Medicare pays for a maximum of only 100 days of nursing home care."



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{8B31BD90-3776-4ED0-8ABA-690E6D961978}&newsid˜6960350&orig=&time=&symb=PRU&sid•6726&source=htx\http2_mw Apparently the average is around $260,000. I personally note that does not apply to those who elect to die suddenly. Apparently, 33% of the population will be in a nursing home for one year or more, 33% less than a year, and the rest have heart attacks worrying about how to pay for it all.



I believe 'the math' behind calculating insurance premiums versus insurance benefits is made a bit easier with good data. But, the $260,000 is only for those who pay medicare and/or private insurance. Hope the above is helpful to some.



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R

It looks like a retired couple needs good supplemental insurance and an income of $160,000 per year after taxes in order to handle the worst case.

So the solution is if a retired couple has enough money is to convert it to an immediate annuity and live it up until they need to go to assisted living.

-- Ron

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C

There are at least 6 levels of "assisted living" situations. I'm going through them with my 88 yo MIL right now. It starts in your own home w/ part-time help coming in for meals and baths. Then full-time help or moving to a home with full-time assistance, but just like a boarding house. No medical on site but 24 hr attendants. This can also be a larger facility w/ extra on-site amenities but still no actual medical except 911. These run in AZ about $3000/mo and up for real fancy. There are also live-in communities that will provide meals and some assistance but you have your own apt or small town house. The next step is the nursing home where you have actual medical staff on call and then a hospice where the situation is terminal. These last two rarely have people for more than a year.

We are now in our 3rd year of "assisted living" and its starting to look like a "Nursing home" is close. So yes "nursing homes" are damn expensive, but not all "assisted living" is "nursing".

I post this because I think many people including financial planners may not have a clear idea of the options available and look just at the worst case.

Chip

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A

Medicare only pays if it is "skilled" nursing home care - e.g. bandage changing, IVs and therapy. Just been fed and washed is not skilled and not covered.

The statistics that I have (from a 1992 study) are not that severe as far as the odds of going into a nursing home (but they are still not good)

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