My neighbor's husband, and their experience with long-term care

This morning I took a walk through my neighborhood, with my almost 3-week old son in his stroller. He had been crying all night, so I tried giving him a stroll to put him to sleep.

Two wonderful things happened: (1) He quit crying and went to sleep and (2) I met a wonderful neighbor with a personal long term care situation.

It was nice to meet this lady, but her situation is anything but nice. The woman’s 89-year old husband is receiving long term care. He’s been receiving care since December of 2006, or for a little over 8 months. Like most people receiving care, he prefers to stay at home with his wife, instead of going to a nursing home.

I might be an insurance salesman, but I don’t bring up the topic to everyone I meet. My neighbor brought this up during our conversation. When a topic weighs heavily on your mind, you can’t help but bring it up to other people. So after she broached the subject, I told her I sold long-term care insurance and have a keen interest in the cost of care. Next thing I know, she is volunteering information about costs that I would never have asked out of politeness.

She told me that they pay over $10,000 a month for her husband’s care. That means they have been out at least $80,000 since he started receiving care in December 2006. Why is his care so expensive? Because he needs 24-hour supervision from a paid staff of nurses.

I’ve gone over the costs of long-term care before. You can see in detail what I have written by clicking here.

To sum up, the average annual cost in Tennessee for a nursing home is $59,276. The average cost for assisted living is $27,409.44. And the average cost for home health care is $42,094, based on 50 hours of care per week.

My neighbor’s husband, however, needs 24 hours of care a day, or 168 hours per week.

According to the Genworth Cost of Care Survey for 2007 the average cost of home health care in Tennessee is $16.19 an hour. At 168 hours per week, that comes out to a cost of $2,719.92 per week. With 52 weeks in a year, the total home health care cost is $141,435.84.

So if my neighbor is only spending $10,000 a month, their annual cost of home care is $120,000. They are doing better than the average Tennessee cost of $141,435.

The sad news is that they did not have long-term care insurance. They are going through their savings to pay for this. So far they’ve paid at least $80,000. Who knows how much more they’ll have to pay?

Their situation is a good example of how Medicare does not pay for long-term care. This man is 89 years old. He is on Medicare. In fact, when he first started receiving long-term care, it was hospice care. Hospice care is covered under Medicare. He was believed to be terminally ill, but he recovered. Medicare will pay for hospice care, but if you improve and are taken out of hospice, Medicare stops paying.

Now the couple is burning through savings. Please don’t let this happen to you. We all have a long-term care plan. Some of us choose the plan that costs $120,000 a year. Others choose the plan that costs a fraction of that, by getting a long-term care insurance policy. Choose the second plan. The premium payments to the insurance company are much cheaper than the actual costs of care.

The Bathtub Hoax and Other "Facts" Accepted as Truth

On December 28, 1917, H.L. Mencken wrote an article that caused much confusion for years to come. It was titled “A Neglected Anniversary.” The article told the history of the bathtub. There was just one thing wrong with the article.

It was entirely false.

He had written it as a joke. But he spoke so authoritatively, and weaved such intricate “facts” in it, that it was accepted as truth. In fact, the article was quoted in medical journals and reference books.

Mencken confessed publicly that the article was written as a joke. However, the false truth persevered.

It is now known that the article was a hoax, but it is interesting to note that commonly accepted knowledge is often times… wrong.

Times may change, but people don’t. And even today people accept as fact some things that are not true.

Today, most people think that Medicare will pay for their stay in a nursing home. This just isn’t true. Medicare will pay for skilled care. Skilled care is for short-term recovery.

There are two words to pay close attention to in that last sentence: “short-term” and “recovery.”

The first word to look at is “short-term.” Medicare skilled care will pay for short-term periods. The first 20 days of skilled care are paid for by Medicare. Days 21-100 are partially paid for by Medicare and the patient (or Medicare supplement insurance if a patient has it). After day 100 of skilled care, the patient pays the full amount of costs.

The average nursing home stay is 2.4 years according to MetLife.

That’s about 876 days. So after Medicare is finished helping pay for the first 100 days, the nursing home resident that stays for the average stay will have to pay for 776 days of nursing home care.

The average daily cost of a nursing home stay in Tennessee is $147.89. That means the daily rate of $147.89 for 776 days would be a total cost of $114,762.

That’s what Medicare won’t pay.

The second word to look at is “recovery.” Medicare skilled care is given to patients that are recovering. If the patient quits recovering from the illness, the care is no longer classified as “skilled care.” Medicare quits paying.

For example, Medicare skilled care will cover speech and physical therapy... if the patient is showing improvement. If the patient quits showing improvement, Medicare quits paying.

Many patients in nursing homes are not showing improvement. They do not qualify for skilled care coverage under Medicare.

If it is determined that you are showing no improvement Medicare will quit paying, even if the 100 days of Medicare coverage are not up yet. Medicare might quit paying after day 45 of skilled care. Then the care you receive is paid out of your pocket.

When care is no longer of a short-term recovery nature, it becomes long term care.

Forewarned is forearmed. If you have assets you want to protect from long term care expenses, don’t rely on Medicare to protect them. Your best bet is to get a long term care insurance policy for protection.