Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, June 25, 2019

The Future Looks Terrible for U.S. Nursing Home Costs

Nursinghome2Georgetown University Medical Center conducted a six year survey that revealed that the prices of nursing homes have been increasing quickly allover the country. The trend shows no signs of slowing down.

From 2005 to 2011, the period of time reviewed by the survey, California, Florida, New York and Texas all saw increases that surpassed the inflation rate. The study found nursing home price rises over the period measured generally outpaced increases in overall medical care (20.2%) and general consumer prices (11.7%). Because of the costs of long-term care and the laws governing it, many nursing home residents must spend down the bulk of their life savings before qualifying for federal assistance.

It could be an issue of supply and demand, with more people needing long-term care than facilities that provide those services. More elderly Americans mean more demand for nursing home care, and more demand for nursing home employees. Wages go up, and the cost is passed along to consumers who, under the current system by which America looks after its elderly, coverage is limited. Dr. Sean Huang, the study’s lead author, explained that the growing population of those in nursing homes are those that are they for long stays, including those with Parkinson's and dementia. “Medicare does not cover that. They will pay out-of-pocket until they use all of their wealth.” 

And it does not look like the trend will be changing any time soon, especially with Wall Street seeing money signs. Four out of the 10 largest for-profit nursing home chains were purchased by private equity firms from 2003-2008, and studies on the effect of these purchases show mixed results for consumer effects.

See Luke McGrath, The Future Looks Terrible for U.S. Nursing Home Costs, Financial Advisor, June 25, 2019.

Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.


Current Affairs, Disability Planning - Health Care, Elder Law, Estate Planning - Generally | Permalink


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