A client who heard me speak a number of years ago decided to hire me for an interesting project. He and his wife live in a large beautiful older home (estimated over 5,000 square feet with three floors). The couple was wondering what the potential future costs of staying in the home would be if one or both of them became ill. I generated a report for them based upon three case examples. Although I didn’t know what the current costs of maintaining their home are, I included places in the report to “fill in the blanks.” I gave the couple some general ideas of what they might need to consider in the future. Many of the future costs would vary by the dimensions of their home and the models of safety equipment chosen (e.g., stair lifts, as they had three floors). The report was meant only to give them ideas of what the costs might be, and what they might need to think about for future safety. I ended the report with a ball park comparison of what it might cost to move to one of the higher end senior living communities. Here are the results:
Client M had been healthy until recently when s/he was diagnosed with a serious heart condition. The client was ambulatory, but now needs a walker. Because the disease has left the client very weak, s/he needs help with meal preparation, bathing, dressing, and standby assistance with toileting. In addition, the caregiver must run errands, provide medication reminders, do laundry, and light housekeeping. All of the necessary help can be obtained through a private caregiver from a licensed non-medical home care agency. The current cost for care of the individual would be $22 per hour. The non-medical home care agency estimated that the client would need at least 8 hours of care per day, 7 days a week so as not to exhaust the spouse. Therefore, the cost of the care would be $176 per day, and $1,232 per week. The total annual cost for the caregivers would be $64,064. In addition, the bedroom was on the second floor, so the stairs would need to be modified in order to accommodate a lift, the cost of which would start at $1,600. The bathroom needed to be outfitted with grab bars, and the shower needed to be modified to a walk-in model, with the addition of a raised toilet seat. A ramp needed to be fitted to the back door, with access to the driveway. Additional support had to be hired to keep the ramp and other areas free from snow and ice. The house needed to be canvassed for tripping hazards and slippery floors.
Ten years later, the same client developed health problems that made him/her bound to a wheel chair. The client’s health conditions required a nurse to come and administer intravenous feedings at $50 per hour, four times per week. In addition, the spouse has developed dementia and has begun to wander in the home. Assuming that one caregiver can handle both of the clients’ issues, which may be an optimistic assumption, the cost of the non-medical home caregiver on a 24-hour basis would be $31 per hour (because medical care inflation trends about 4% per year). And, since the client wanders, one caregiver on a 24-hour basis will not work because, by law, the caregiver has to be allowed to sleep for 8 hours uninterrupted. So, the caregiving would have to be handled in two 12-hour shifts, with 2 different caregivers. So, the cost would be 24 x $31 = $744 per day, $5,208 per week, $20,832 per month, and $249,984 per year. If one caregiver is not enough, the cost could be even higher. Add to that cost, $200 per week for the intravenous feedings, and the additional annual cost would be $10,400. The home would have to be made wheel chair accessible with regard to lifts and doorways. If the client cannot transfer out of the wheel chair, a medivan would have to be hired for transportation, the cost of which stands at $55 per trip or more per today’s costs. A care manager would need to be hired to oversee the operations which would be approximately $210 per hour for at least 4 hours a week.
Let’s assume in the above example that the client who has dementia passes away. The living client sleeps through the night, so the cost of the caregiver is $336 per day. The cost of the care is thus $122,640 plus the cost of the intravenous care = $10,400. All other costs would remain the same.
Note: These case examples are grossly general and fictitious. The costs are estimates and are used only for illustrative purposes. They are not inclusive of already ongoing costs in a home. Long term care costs typically inflate at a rate of about 4% per year, and I have made that assumption in these examples. Non-medical home care rates are determined by each agency owner. I have assumed a worst case scenario for illustrative purposes.
The cost of entering a high-end Continuing Care Retirement Community (today) would be $390,000 for a 90% refundable entrance fee. The monthly fee for two people in independent living would be $4,969. If one member of the couple needed care assisted living, memory care, or skilled care, the annual cost would be $56,052. Have I gotten you to think?
Do you need a second opinion? Let Andrea Donovan Senior Living Advisors help. Call us at (708) 415-2934 or email us. Please visit our website. Please watch my video to learn how the process works and learn what some clients have to say.