What State is the Best in Nursing Home Care?

If you’re looking at a nursing home care for yourself or for a parent, there are many factors to consider and expenses to navigate. KAKE.com’s recent article, “Best States for Nursing Home Care–2019 Edition,” ranked the states on the following metrics:

  • Nursing homes per 10,000 seniors
  • Nurse staffing hours per resident per day
  • Average fine amount incurred by nursing homes
  • Percentage of long-stay residents with depressive symptoms
  • Percentage of long-stay residents with worsening health
  • Percentage of short-stay residents with improvements in function
  • Percentage of short-stay residents assessed and given the flu vaccine appropriately
  • Average cost of nursing home care

The state with the highest cost of nursing home care in the study is Alaska. According to Genworth Cost of Care Survey data, the average annual cost of nursing home care in the state is $351,495. That is more than six times the cost in Oklahoma—the state in the study with the lowest average annual cost.   For Massachusetts, the Genworth Survey provides that the annual median cost of nursing home care is $162,608 in the Boston area.    While that is the median according to Genworth,  it is not unusual to see costs between $15,000 to $17,000 per month, or $180,000 to $204,000 per year in the area.   An elder law attorney can help you in planning for long term care.

  1. Arkansas. The “Toothpick State” leads the way with the fifth-least expensive average cost of nursing home care in the country, at just over $64,000. Arkansas also ranks 10th overall in terms of nursing homes per 10,000 seniors, at 4.63. The average fine amount for a facility in Arkansas is $16,180, which ranks in the middle of the study.
  2. North Dakota. North Dakota leads the study in its percentage of short-stay residents with improvement in function (78.14%), according to Medicare data. They’re fifth for the number of nursing homes per 10,000 seniors (7.10). While ND ranks in the top 10 for some other metrics, including daily nurse staffing hours per resident and low average fine amount, one area where it doesn’t place as well is the average cost of nursing home care: the average cost is $132,320, the fifth-most expensive amount in the study.
  3. Mississippi. The Magnolia State takes third place, with the sixth-highest rate of short-stay residents assessed, at 88.65%. It also ranks in the top 10 of the study for the average fine amount of just $6,231 and the relatively low 1.49% of long-stay residents showing depressive symptoms. The average cost of nursing home care in Mississippi is $80,300.
  4. Minnesota. The Gopher State ranks eighth in the study for the average fine amount ($5,658). Minnesota is seventh for short-stay residents showing functional improvement (74.34%). However, the average cost of nursing home care is at the bottom half of the study at $109,500.
  5. California. The Golden State ranks well in terms of the efficacy of its nursing homes, with the lowest rate in the study of depressive symptoms for long-stay residents (0.73%). California has the second-lowest rate of long-stay residents with worsening health at 13.83% and the seventh-highest rate of short-stay residents assessed at 88.42%. California ranks 31st overall in terms of cost with an average of $100,375 per year and in the bottom 10 of the study for nursing homes per 10,000 seniors at 2.17.
  6. Nebraska. The Cornhusker State has the fourth-highest number in the study of nursing homes per 10,000 seniors, at 7.15. It also has the fifth-highest rate of short-stay residents showing improvements in function, at 76.01%. Nebraska has a top-20 rate for cost, with an average cost of nursing home care of $82,855 per year.
  7. Louisiana. The Pelican State enjoys the fourth-lowest average cost for nursing home care in the study ($62,780) and the seventh-lowest average fine amount that nursing homes in the state incur ($4,998). Louisiana has top-10 percentages for of long-stay residents reporting depressive symptoms (1.10%), and only 15.61% of long-stay residents show worsening health.
  8. Missouri. The average cost of nursing home care in Missouri is only $60,225—the third-lowest overall. There are 5.19 nursing homes per 10,000 seniors in Missouri, the seventh-highest amount in the study. The Show-Me State also has the fourth-lowest percentage of worsening health for short-stay residents (14.86%). It’s one of the cheapest states to buy a home, which may be ideal for those who are considering relocating to be closer to family.
  9. Utah. The Beehive State has the eighth-lowest average cost of nursing home care in this study at $73,000 per year. Utah also has the sixth-lowest rate of worsening health in long-stay residents (15.51%), and the 10th-highest rate of short-stay residents being assessed (86.57%).
  10. Alabama (tie). In Alabama, a year of nursing home care costs $75,347 on average. That’s the 10th-lowest rate in this study. The Yellowhammer State finishes in the top five for long-stay residents. Only 1.08% of long-stay residents show depressive symptoms, and only 14.62% show worsening health.
  11. Arizona (tie for #10). The Grand Canyon State has the fourth-lowest average fine amount on this study ($2,582). The state leads the study when it comes to the percentage of short-stay residents getting assessed at 91.25%. The average cost of nursing care is $77,928 per year, a top-15 rate.

Reference: KAKE.com (October 9, 2019) “Best States for Nursing Home Care – 2019 Edition”

 

How to Manage the Cost of Long Term Care

A single woman has seen her annual premiums for long-term care rise by more than 60% over the last six years. Her cost in 2018 was $2,721, up from $1,626 in 2013. She’s keeping her policy, reports CNBC in the article “Long-term care insurance costs are way up. How advisors can help clients cope”

For her, the price she is paying is worth the cost. However, these types of increases can take older individuals off guard, especially if they are living on a fixed income.

Last year, Genworth Financial received 120 approvals by state regulators to increase premiums on their long-term care insurance business. The weighted average rate increase was 45%. General Electric said earlier this year that it expects to raise premiums on its LTC policies by $1.7 billion in the next ten years. Insurers hold between $160 to $180 billion in LTC reserves, covering 6 to 7 million people, according to estimates from Fitch Ratings.

Elder care has also become increasingly expensive. The annual national median cost of a private room in a nursing home was $100,375 in 2018, according to Genworth Financial. The annual national median cost of a home health care aide was $50,336 in 2018.  In the Greater Boston area, the average cost of a private room in a nursing home is approximately $15,000 per month or $180,000 a year.

Insurers entering the business in the 1990s and early 2000s didn’t anticipate that so many policyholders would continue to pay their premiums and eventually file claims. Fewer than 1% of policyholders have let their policies lapse, and this caught many companies off guard.

Low interest rates have also hurt overall profitability for the insurance companies.

About 40% of the bonds held in insurance companies’ general accounts had a maturity of more than 20 years at purchase, said the American Council of Life Insurers.

There are a few ways to tweak benefits to keep premiums more affordable, while continuing to have this essential coverage.

Daily Benefit. Policies sold in 2015 had an average daily benefit of $259. Paring down the daily benefit could keep premiums down.

Benefit Period. Insurance contracts sold in the 1990s and early 2000 could pay out for the remainder of a client’s life. Reducing that period to five or ten years could make premiums lower.

Inflation Protection. Inflation riders help stay ahead of the rising cost of care. For older policyholders, this might reduce the inflation protection.

Waiting Period. Most policies have a waiting period before benefits will be received. Adjusting this period of time might reduce benefits.

Policyholders are advised to speak with the insurance company directly, instead of relying on the premium increase notices. This may reveal more options that can be used to reduce the premiums, without sacrificing too much in the way of coverage.

Reference: CNBC (September 8, 2019) “Long-term care insurance costs are way up. How advisors can help clients cope”

 

Dark Side of Medicaid Means You Need Estate Planning

A woman in Massachusetts, age 62, is living in her family’s home on borrowed time. Her late father did all the right things: saving to buy a home and then buying a life-insurance policy to satisfy the mortgage on his passing, with the expectation that he had secured the family’s future. However, as reported in the article “Medicaid’s Dark Secret” in The Atlantic, after the father died and the mother needed to live in a nursing home as a consequence of Alzheimer’s, the legacy began to unravel.

Just weeks after her mother entered the nursing home, her daughter received a notice that MassHealth, the state’s Medicaid program, had placed a lien on the house. She called MassHealth; her mother had been a longtime employee of Boston Public Schools and there were alternatives. She wanted her mother taken off Medicaid. The person she spoke to at MassHealth said not to worry. If her mother came out of the nursing home, the lien would be removed, and her mother could continue to receive benefits from Medicaid.

The daughter and her husband moved to Massachusetts, took their mother out of the nursing home and cared for her full-time. They also fixed up the dilapidated house. To do so, they cashed in all of their savings bonds, about $100,000. They refinished the house and paid off the two mortgages their mother had on the house.

Her husband then began to show signs of dementia. Now, the daughter spent her days and nights caring for both her mother and her husband.

After her mother died, she received a letter from the Massachusetts Office of Health and Human Services, which oversees MassHealth, notifying her that the state was seeking reimbursement from the estate for $198,660. She had six months to pay the debt in full, and after that time, she would be accruing interest at 12%. The state could legally force her to sell the house and take its care of proceeds to settle the debt. Her husband had entered the final stages of Alzheimer’s.

Despite all her calls to officials, none of whom would help, and her own research that found that there were in fact exceptions for adult child caregivers, the state rejected all of her requests for help. She had no assets, little income, and no hope.

State recovery for Medicaid expenditures became mandatory, as part of a deficit reduction law signed by President Bill Clinton. Many states resisted instituting the process, even going to court to defend their citizens. The federal government took a position that federal funds for Medicaid would be cut if the states did not comply. However, other states took a harder line, some even allowing pre-death liens, taking interest on past-due debts or limiting the number of hardship waivers. The law gave the states the option to expand recovery efforts, including medical expenses, and many did, collecting for every doctor’s visit, drug, and surgery covered by Medicaid.

Few people are aware of estate recovery. It’s disclosed in the Medicaid enrollment forms but buried in the fine print. It’s hard for a non-lawyer to know what it means. When it makes headlines, people are shocked and dismayed. During the rollout of the Obama administration’s Medicaid expansion, more people became aware of the fine print. At least three states passed legislation to scale back recovery policies after public outcry.

The Medicaid Recovery program is a strong reason for families to meet with an elder law attorney and make a plan. Assets can be placed in irrevocable trusts, or deeds can be transferred to family members. There are many strategies to protect families from estate recovery. This issue should be on the front burner of anyone who owns a home, or other assets, who may need to apply for Medicaid at some point in the future. Avoiding probate is one part of estate planning, avoiding Medicaid recovery is another.

Since the laws are state-specific, consult an elder law attorney in your state.

Reference: The Atlantic (October 2019) “Medicaid’s Dark Secret”