Rising costs for long-term care, coupled with lower home values, has resulted in a greater bite into a senior's home today than it did five years ago, an insurance agency that specializes in long-term care products said.
According to Denise Gott, chairman of LTC Financial Partners LLC, Kirkland, Wash., when the company first translated long term care costs into square feet of real estate in July 2005, the national average cost for a private room in a nursing home was equivalent to the value of two square feet per day in an average American home.
In 2010, that ratio has grown to nearly three square feet per day. The calculation uses figures from the National Association of Realtors that give the median price for U.S. homes at $183,700 and U.S. Census Bureau data which gives the average home size at 2,422 square feet. Therefore the average per square foot is just under $76, while the cost of a private room in a nursing home is $219 per day.
Since these are just averages, some homes have a bigger LTC bite than others because they are worth less.
Gott said "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 incapacity, or a family member is, there goes another sizeable chunk of your home."
While long-term care insurance is one answer to the problem of care costs eating up home equity, another answer Gott said, is a reverse mortgage to help pay for long-term care. LTC has a reverse mortgage affiliate, Reverse Mortgage Direct.
