November 2023
Elder Law Update. News and Important Information for Seniors and Their Families
 

With skilled nursing home care prices rising year after year, many retirees are looking into other avenues for their end-of-life care. Some are building additions onto their homes for whatever full-time care they may receive in-home in the future, and some are building tiny accessible homes on their children’s property. If the construction projects aren’t for you, some retirees are hitting the seas.

Mama Lee Wachtstetter began living on a cruise ship in 2008, and remained there into her 90s, more than 12 years later. It cost her approximately $164,000 per year for her single-occupancy room. That sounds expensive but even an “all-inclusive” assisted living facility would not have provided the same quality of goods and services. Mama Lee enjoyed daily lunch and dinner with beverages, tips, daily ballroom dancing, cocktail parties, movies, lectures, other shows, and entertainment and most uniquely: the opportunity to travel and meet people from all over the world. She said the one thing she missed was her family, but she stayed in touch with them via laptop and telephone and was able to see them about five times per year when she docked in Miami.
Three photos of elderly couples enjoying cruise life.

Others have followed in her footsteps. An Australian couple booked 51 back-to-back cruises, culminating in a 455 day trip…and they have no plans to stop anytime soon. They realized living on a cruise ship is cheaper than traditional retirement care. They are among a growing group of seniors who are spending their money being catered to on a cruise ship, for less than the cost of a nursing home.

  • The average cost of a nursing home as of 2022 is $8,821 per month (that’s over $100,000 per year!)
  • It is estimated that between 27 million and 30 million adults over the age of 60 will need long-term care services, whether in-home or in a facility, by the year 2050.
  • And for those clients who say “my kids will take care of me”: The estimated dollar value of long-term care provided by unpaid caregivers as of 2013 was $470 billion dollars. The average percentage of caregivers for people age 50 or older who said they were experiencing high levels of financial strain was 36%.

While those requiring higher levels of skilled care will not be able to reside on a cruise ship, it may be an option for some. If you are fortunate enough to afford the bill of a cruise ship, why not see the world while having unlimited entertainment at your fingertips? Would you consider retiring on a cruise ship, at least for a couple years?
 
Long-Term Care in hand writing on notebook paper.

The extreme cost of skilled care is leading to many more people looking into additional benefits to help cover those costs. The average cost of a semi-private room in a skilled nursing facility was $94,900 per year, in 2021. Assisted living, home health aides, and in home care can cost between $50,000 and $60,000 per year as well. No matter what type of care you end up needing, it will likely require some level of financial planning.

If private paying does not sound like the desirable choice, there are a few different options to help cover the exorbitant cost of care. Two federal programs, Medicare and Medicaid, try to provide some relief. However, Medicare only covers up to 100 days, but rarely that many. Also, for Medicare to pay, it must be for short-term care, or for care provided at home or in a nursing facility that is connected to physical rehabilitation, like after a surgery or other qualifying hospital stay. It is not a solution to help pay for long-term-care stays.

Medicaid, is a federal health insurance program that could provide a little more financial support. It’s a program that pays for a portion of at-home or nursing home care, but to qualify you must have limited financial assets and income. Despite it being a federal program, each state decides how to administer that program, so rules vary widely across the country for who may qualify. Using the proper estate planning tools, including an irrevocable trust, you may qualify for Medicaid even if you have accumulated many assets during your lifetime.

With Medicaid planning, you should start early. There is a five-year lookback in all states except for California, so planning needs to be contemplated and in place for at least that long. Of course, you can still do planning in a crisis, but you likely will not be able to protect as much of your hard-earned assets. Even with these potential federal funds available for care, often times there is still a large bill for the person receiving the care. One way to supplement your income to cover these costs, is through long-term-care (“LTC”) insurance. LTC insurance is a private option for individuals or couples. This – like other types of insurance – requires payment of a premium monthly or annually. Although it is another monthly expense, it could get you a tax break if you itemize your deductions at the end of the year.

When shopping for a LTC insurance policy, you can choose the rate of the policy; whether it pays monthly or daily to the facility; how long the “elimination period” is (or amount of time you must be in a facility before the policy kicks in, kind of like a deductible); and the duration of payments, typically offered in months or years.

One downside is that LTC policies are quite expensive; insurance companies see the same average nursing home rates that we do and price their plans accordingly. The more coverage you buy, the more expensive the premiums. Plus, LTC insurance companies are picky about to whom they extend coverage. Just like other types of insurance, it is better to get a policy while you are younger and healthier. Single individuals and women also tend to pay more for LTC insurance plans than men and married individuals.

No matter what route you take, pre-planning for your end-of-life-care will allow you to have the most flexibility and options in the time of your health crisis. If you are considering purchasing a long-term-care insurance plan, talk with your estate planning attorney to see what they advise, based on the other rules and programs in your state. Long-term-care insurance may be an option to supplement the high costs of skilled nursing home care for some.

Talk with your estate planning attorney to discuss the pros and cons specific to your situation.
 
Christine C. Weiner