Nursing home costs can cost upwards of $100,000 a year, a heavy financial burden even for Americans who have set money aside for their later years — and a crushing one for those who haven’t. And those costs are rising, even outstripping the rising cost of health care in the U.S.
The cost of nursing home care is a particular risk for people without long-term care insurance or Medicaid coverage, Huang said, noting the number of Americans who are already short on retirement savings. Annual out-of-pocket expenditures can easily exceed $70,000, found the analysis of prices from 2005 through 2010 across eight U.S. states.
“For someone who is not poor enough for Medicaid or who doesn’t have long-term care insurance, this will be a huge financial burden,” Huang told CBS MoneyWatch.
For-profit nursing home chains were the least expensive, while nonprofit chains were the most costly, according to the report. Independently operated for-profit and nonprofit facilities were similarly priced. Nursing homes in New York had the highest average cost in the U.S. at $302.30 per day, while Texas had the lowest at $121.90, according to the study, which drew on data from 2005 to 2010. Over that period, costs in the eights states rose faster than the roughly 20% increase in overall medical care prices.
Most Americans are eligible for Medicare at 65, with the government program covering some routine and emergency health care, but not long-term care, such as that provided by nursing homes. Although it’s cheaper to buy long-term care insurance in your 40s and 50s, most people don’t, focusing instead on other financial priorities like paying for a child’s college expenses.
That can prove costly. Huang noted that three-quarters of Americans 65 and older will need to use a nursing home at some point, but only a small fraction had long-term care coverage.
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