It’s one of the big “what-ifs” that hangs over us as we get up there in age: What if I need to go into a nursing home someday?
Most of us have heard tales of staggering costs — often $200 to $300 a day or more, according to one much-quoted study. We may even have relatives or friends who have already racked up such bills.
A new report by RAND Corporation, a U.S. nonprofit global policy think tank, however, offers some reassurance. While a nursing home stay may be nothing to look forward to, it is rarely as expensive as many of us fear.
RAND researchers analyzed data on men and women born between 1919 and 1923 and found that only 32 percent of them had to pay anything out of pocket for nursing-home care. If they had to go into a nursing home at all, their costs were most likely covered by private insurance, Medicare (which pays for some post-hospital rehabilitative care), or Medicaid. For people who did face out-of-pocket costs, the average was a relatively manageable $7,300 or so.
Of course, that’s an average, so some people paid more and some less. At the high end, 5 percent of people paid $47,000 or more for nursing-home care, according to the report, published the week of Aug. 28, 2017, in the Proceedings of the National Academy of Sciences.
Brief nursing home stays are increasing
If those findings are something of a silver lining for most people, the RAND report also brought forth a cloud. The odds of spending time in a nursing home are greater than previous studies have indicated, the authors contend.
By their analysis, 56 percent of men and women who are now between the ages of 57 and 61 are likely to spend at least one night in a nursing home during their lives. Earlier estimates have put that figure at about 35 percent. One reason for the discrepancy: The RAND data included people who went into a nursing home for a brief stay covered by Medicare, which earlier studies did not.
Among other findings in the report, which drew on data from the giant Health and Retirement Study sponsored by the National Institute on Aging and the Social Security Administration:
Women are more likely than men to spend time in a nursing home (64 percent vs. 51 percent), largely because women tend to live longer.
Smokers are less likely than nonsmokers to go into a nursing home (54 percent vs. 65 percent), because of smokers’ shorter average life spans.
People with children have lower average out-of-pocket costs than their childless peers ($6,422 for people with one to three children and $5,532 for those with four or more vs. $8,943 for those with none). Having children has little statistical effect on whether or not a person will eventually enter a nursing home, the researchers found, but it may mean spending less time (and money) in one.
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Greg Daugherty is an award-winning writer and editor specializing in retirement topics. He has served as editor-in-chief of Reader’s Digest New Choices retirement magazine, executive editor of Consumer Reports, where he wrote a popular column about preparing for retirement, and senior editor at Money. His work has appeared in Money, Smithsonian, Parade, The New York Times, and NextAve.org, among others.