Reverse Mortgages and Long Term Care
Your decision to get a Reverse Mortgage should probably involve an analysis of your long term care plans. Research indicates that at least 70 percent of people over 65 will need long term care services at some point in their lives.
Many people secure a Reverse Mortgage in order to fund long term care services in their own home.
And the good news is that the recently published “GenWorth 2013 Cost of Care Survey,” found that the costs of in home health care has been relatively flat over the last five years while the costs of long term care in an institutional setting (adult day care, assisted living and nursing home care) have risen fairly dramatically over the last five years while.
Here are a summary of the current average costs and percentage cost increases for various types of assisted living:
- Homemaker Services: The national hourly median rate for homemaker services (help with cooking, cleaning and errands) is currently $18 – it has risen 0.84 percent annually over the last five years.
- Home Health Aides: Home Health Aides help with bathing and dressing, but do not provide medical care. The hourly rate has risen only 1 percent annually over the last five years and is currently at $19 an hour.
- Adult Day Health Care: Adult Day Care is an institution that provides social and other related support services during the day, but the patient does not reside at the center. The current national median daily rate is $65. This reflects a 6.56 percent increase since 2012, but only a 1.61 percent five year annual growth.
- Assisted Living: Assisted Living facilities provide hands on personal and medical care for those who cannot live on their own, but do not require constant care. The national median monthly rate is $3,450 (equivalent to about $115 per day). Assisted living costs have grown at 4.26 percent annually in the last five years.
- Nursing Homes: Nursing homes provide skilled nursing care 24 hours a day. The national median daily rate for a private room in a nursing home is $230 a day. This cost has seen a five-year annual growth of 4.45 percent.
When you go through the Reverse Mortgage application process, you will be required to participate in a Reverse Mortgage counseling session. Most borrowers find these sessions extremely useful as they can help you with budgeting and thinking through long term care options.