Ep 70: Cost of Care

Good morning, folks, today I want to have a conversation about that little tiny word cost, the “Cost of Care”, that we've talked about a lot, where are? Two days after a an election, and where are we in in reality? Care is expensive. 

We talk about that all the time. It's not going to get any cheaper. As in-home care companies, and as community care companies have the cost of doing business, all the expenses they have (paying their caregivers, etcetera, etcetera), we're just going to see the cost going up. So whether you want to bring someone in to take care of an older loved one in their home, or whether that older loved one is going to move, based on need, to an assisted living or memory care, it's just going to get more expensive.

Obviously, and some of you may know this, if the Vice President had won, which she obviously did not, but she was talking about utilizing Medicare to help pay for the cost of care. So what does that mean? 

LISTEN HERE

We are not sure. Would it have paid for the total cost of some one to come in the home? Would it have paid for the total cost of Mom/Dad/Grandparents in an assisted living, living memory care?
Again, we are not sure. Let's assume it paid for half of it. Obviously, for most people in this country, that would be extremely beneficial when we're talking average cost nationwide of about $5,000 a month in a community defraying half of that cost would have been extremely helpful.

The way the election went, I'm not about to get into politics, but the way the election went, that's not going to be happening. We're not going to see anywhere in the near future Medicare being used to help pay for the the cost of care. So what does that mean? It means we're right where we were on November 4th of this year. It comes out of our pocket, our families pocket, comes from a long term care insurance policy, or another way you can finance care through. But basically you're having to, as you always have, pay for the cost of care. And as I said a few minutes ago, the cost is going to keep going up.

When we were taking care of our four parents that ended in 2019, it was a tiny bit cheaper. It's more expensive now. It's 2024.

What do we do? I keep harping on something that I talk about all the time. We need to make sure that as people start earning money in this country, whether they're 25, 30, 35 years of age, they're working in a job, they're consistently making money, they have parents, they have grandparents- to educate them that there's a realistic chance that those parents/grandparents, and some day, those 30 and 35 year olds, are going to need care. Let's say their parents are 70-75 years of age and something happens where they need care in the home, in a community living setting, we need to ask to understand if they have saved enough money through their lifetime? We're talking about $5,000 on average in a community, plus more in a memory care and pushing $40.00 an hour for home care to come in the home. How many hours a day does that person need care? Or do they have to go to their family and say, folks, we're going to need help? We have to compile money to be able to make these payments every single month... So what I keep harping on, I truly don't understand the financial industry in this country, I have talked to so many of those folks over the years that truly do not understand a.) The different locations of where care can be given and b.). What it costs?

And then, because of that, they're not having a comprehensive conversation with clients from 25, 30, 35 on up about this little tiny word "CARE" being a huge issue. They keep talking about retirement. Yes, we all want to retire. We want to have these wonderful years in our in our golden years. But we talk about this, most of us at some point are going to need care. Where's the money going to come from? Our financial industry needs to understand important aspects of care, including:

• There's no such things as a nursing home, they're called skilled nursing or rehabilitation centers.
  • What do they do?
  • Who goes there?
  • What are the costs?
  • How is that going to work?
  • How long potentially is Medicare going to cover a 70-75 year old's bill in a skilled nursing facility?
• What is an assisted living?
  • What do they do?
  • Who should really be living there?
  • What do they cost? And yes, this differs throughout the country. That's why I'm saying, on average, about $5,000 a month.
• What is the memory care facility?
  • Who needs to go there?
  • Again, cost differs around the country. But most locations, you're probably talking $8-9,000 a month, $10,000 a month. In some locations like New York, California, Texas so on and so forth...in big cities- you can be talking $12-15,000 a month or more.

So this financial industry really has to understand this issue and start talking to folks in this country once they start making money.

What other choice do we have? We're going to have almost 80 million boomers moving North, the oldest turning 80 in 2026...That's what little over a year away. How are we going to pay for all this care? Where are those folks going to live? Are we going to put them all on the street? "Hey, Mom, Dad, Grandparents, we love you guys, have a great rest of your life. Here's a blanket. It's kind of cold at night."...I mean, what are we going to do?

And if Medicare is not going to be helping us for probably quite a while, if ever down the line, pay for this long term care, meaning we need care for a long term, what do we do? We can't close our eyes and pretend that it just doesn't happen. You don't want to not talk about it, like my wife and I did, and all of a sudden (again we were special, with all four of our parents needing care and most aren't going to have that), but I've talked about this numerous times - that taking care of one parent is tough enough. So one parent, let's say it's $5,000 a month, does the family have that $5,000 a month? Month after month, after month...the parent's in an assisted living two years, three years, four years- you guys can do the math.

• Maybe they had a home and maybe you were able to sell that home to pay for those costs.
• What if they don't have a home? Where's the money going to come from?
• Was their equity in the home?
• How is this all going to work?

That's why I go back to that 4 letter word: "PLAN". We have to plan for these costs.
They're real. "Oh maybe it'll happen..." No, not "Maybe it'll happen..." There's a very good chance. We're living a lot longer through great things like medication and medicine in general. We see many people live to over 90, quite a few live to over 100. We've talked about this, so you want to retire at 65 or 70, great, well do you got another 25-30 plus years of income there to be able just to live? Where's the money going to come from if you need care?
Then we can think about Medicaid. Awesome. But the only place currently, and I don't see this changing for quite a while down the line, in most states, the only place where you're going to be able to get that care is in a skilled nursing facility. You're going to have short-term people there recovering from a stroke, a broken hip. They're going to be there for three weeks, four weeks, whatever it may be and move on. You're going to have long term people there that need care on a continuous basis. I don't know how many of you have ever stepped foot in a skilled nursing facility. I've not only stepped foot in one, I've been a patient in one. They look like a hospital. They smell like a hospital. They act like a hospital. It's not someplace most people want to be living for years. Think about that.

You want to live someplace where you really want to live, for most people that is at home.
Can you afford $40.00 an hour? That's going to get even more expensive as the next few years move on. Do you need 2 hours, 3 hours, 10 hours, 15 hours, 24 hours a day? Again, do the math. Most areas are around $40, and in California, Texas, Dallas, New York, Chicago, more than that- pushing $45 per hour in some locations.

I've talked about this a few times in recent months, we're launching a new non profit after the first of the year, hopefully closer to the first of the year versus the middle of the year, called "APlan2Age". Our goal with that is really teaching people how to plan. What do you need to do?
Who do you need to be talking to? We're also going to have that set up, so if you already are in crisis, who do you reach out to? Who can help you? Who can you talk to? So a lot of resources to help people to make this process easier, especially if you haven't talked about it or thought about it and now a loved one is dealing with a crisis which is affecting the family. But again, that 4 letter word "PLAN"- It's going to be so much easier for most of us if we're dealing with this per a plan, than we are in crisis. And a good portion of that plan is "Holy Bejeebers, how are we gonna pay for care if Mom or Dad or Grandma or Mother-in-law needs care?" And we talked about this and we live, pick a city we live in Boulder, Co, and Mom and Dad are still in the house that we grew up in Tucson. That's not close. You can't drive over there. If they need care and they're adamant about staying at home, how are you going to pay for it? Can they really go to the bathroom, get dressed, cook the meal, eat the meal, so on and so forth. Can they complete activities of daily living? They don't want to move to an assisted living. They're adamant, as so many people are, and I understand that you want to stay in your home. But is that reality? Here we are again November 7th, 2024. We need to think about reality. We need to think about if Medicare helping us with care would have been the "Calvary coming", but the cavalry is not coming. We have to pay for this. We need to figure it out so we can retire and enjoy life. We've worked for 20, 30, 40 years or more. We want to enjoy life. We want to travel, we want to do those types of things. We want to see grandkids if we have them. Then something happens, a fall, an illness- both. Things change.

I don't like to constantly harp about this, but I feel like I have to. We as a nation need to understand that we've never been in the position we're in, with almost 80 million folks, the baby boomers, aging and the potential of needing care. The baby boomers, who, the youngest are 60 this year and the oldest will be 80 in less than a year. Folks think about it. Talk to your loved ones. Talk to your family. Reach out to a financial advisor. If they really don't understand this, reach out to more until you find someone that does and can help you plan.

Comments, questions, want to be a guest on the podcast?
Reach out to me, [email protected].

Until we talk again, have yourself an awesome day.