Insurance

On the Watch: Most and Least Expensive States for Assisted Living Programs

Most and Least Expensive States for Assisted Living Programs

Assisted living is a retirement expense that you may or may not encounter, but it’s one worth considering.

According to research from Seniorly, which helps consumers choose senior living homes that meet their needs, the monthly cost of living in a facility that provides such care averages $4,057 (or $48,684 annually) in the United States. The monthly fee varies from $3,045 ($36,540 annually) in Georgia to $5,893 ($70,716 annually) in New Jersey.

According to the new survey, below are the most expensive States coupled with the monthly cost for assisted living facilities:

  • New Jersey: $5,893
  • New Hampshire: $5,644
  • Alaska: $5,514
  • Massachusetts: $5,421
  • Washington, D.C.: $5,369
  • Delaware: $5,286
  • Hawaii: $5,063
  • Washington: $4,995
  • Connecticut: $4,726
  • Maine: $4,711

Below are the least expensive States:

  • Georgia: $3,045
  • North Dakota: $3,069
  • Missouri: $3,084
  • Nevada: $3,123
  • South Dakota: $3,138
  • Arkansas: $3,190
  • Utah: $3,244
  • Alabama: $3,265
  • Kentucky: $3,288
  • Florida: $3,299

Assisted living and nursing facility care are both considered long-term care, which is often not covered by Medicare. While many retirees will eventually require some level of daily assistance, others will not. So, what are your options for covering this unforeseen expense?

Some retirees prefer to “self-insure” – that is, finance the unpredictability with their assets. That could entail using retirement assets, taking out a reverse mortgage, or selling a vacation house, for example.

Leaning on family members or spending down (or hiding) assets to qualify for Medicaid-funded nursing-home care are two more choices.

According to the Secure Retirement Institute, the most basic option — long-term-care insurance — has become too expensive for many consumers, resulting in a 60% reduction in sales from 2012 to 2018. Many insurers have also left the market as claims have exceeded estimates.

According to the American Association for Long-Term Care Insurance, the average annual premium cost for beginning benefits of $165,000 for a 60-year-old couple ranges from $2,600 to $8,750, depending on whether or how much the benefits increase annually.

However, according to the group, there’s a 50% possibility of never having to use the insurance.

Some financial experts advise consumers to purchase a hybrid policy that combines life insurance with long-term care insurance. This can be accomplished either through a new purchase or by converting a current term or whole life insurance policy to the option.

While the details of each policy differ, the concept is that you can use the death benefit during your lifetime to pay for support if you need it, albeit doing so reduces the amount your heirs would inherit. Some hybrid plans include long-term care insurance in addition to the death payment.

However, much like with a traditional long-term-care policy, you must be insurable — that is, pass medical underwriting.

To fund it, you’ll usually require a large sum of money. Some insurers require a lump sum payment upfront, while others enable you to pay your premiums over a period of time.

About the author

Dotun O

Dotun is a financial enthusiast who specializes in first-in-class financial content including crypto, blockchain, market and business to educate and inform readers.