KIRKLAND, Wash. (SEND2PRESS NEWSWIRE) — The rising cost of long term care, abetted by depressed home values, is taking a bigger bite out of American homes today than in 2005, according to LTC Financial Partners, LLC (LTCFP), one of the nation’s most experienced long term care insurance agencies.
“Five years ago we started translating long term care costs into square feet of real estate, to highlight the heavy burden of paying for care,” says Denise Gott, LTCFP’s Chairman of the Board. “In July of 2005 we calculated that the average national cost for a private room in a nursing home was ‘eating up’ two square feet of the average American home each and every day.” Now, in 2010, it’s gotten worse, she reports. “Care costs are consuming nearly three square feet per day, 2.88 to be precise.”
LTCFP developed the estimate based on the following facts:
The national average annual cost for a private room in a nursing home is now $79,935, according to the latest MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, released in October, 2009. That’s about $219 a day, up from $190 in 2005.
The National Association of REALTORS(R) reports that the median price for U.S. homes is currently $183,700, according to their latest survey. With an average 2,422 square feet per home, according to the U.S. Census Bureau, that equals $75.85 per square foot, about enough to pay for a third of a day of nursing home care.
Some homes are “eaten” much faster than the median rate. Unfortunately, the less a home is worth, the bigger the relative LTC bite; it can be much higher than three square feet per day. For example, consider a 1,286 square-foot home for sale at $33,300 in Pennsauken, NJ. It would be “eaten” at the whopping rate of 8.46 square feet a day! “If you don’t qualify for Medicaid and you’re not protected by long term care insurance, you need to realize that for every day you’re incapacitated, or a family member is, there goes another sizeable chunk of your home,” says Gott.
She observes, “When you reflect on how quickly care costs are eating up our home equity, the question naturally arises, what can we do about it?” Long term care insurance is the answer for millions, she says. “It protects your home and your savings, and the right policy can be very affordable.” A free informational guidebook — Dignity for Life, the definitive long term care insurance guide — may be requested from the LTC Hotline, at http://www.ltchotline.com/ .
For people who do not wish long term care insurance, or do not qualify for health or other reasons, a reverse mortgage can be a solution. “It lets you tap the value of your home to pay for care, with no monthly mortgage payments while you live in your home,” Gott concludes.
Information is available from Reverse Mortgage Direct, an LTCFP affiliate, at http://www.reversemortgagesdirect.info/compare .