Nursing Homes: the business of taking care of our loved ones

My great-aunt Mabel and me. 2017 Author's Photo.

My great aunt has been in the nursing home for nearly a decade. Her retirement yields a little over $5,000 a month (post tax). The nursing home monthly bill is $7,000. We've finally depleted all invests, annuities, and other assets and will be making the move to Medicaid.

I find it amazing that in Delta County, where the cost of living is the lowest in the state and the aides, cooks, and most of the support staff earn minimum wage, and through all this, a monthly bill is over $7,000! All this gets you a twin bed in a shared room where they provide one shelf for personal affects and tell you not to hang family photos, repaint, or other change the sterile institutional white room. My brother's sub had more personal space than these nursing homes.

With an occupancy rate of say 50, this is $350,000 per month or $4.2 million per year, plus an additional million in subsidies for providing ageing care services in the rural areas. The institution is a non-profit, so there aren't really any taxes to worry about, which begs the question of how in the world is so expensive?

What is even more amazing is that the nursing home is subsidised directly by state and federal government and the facilities themselves are at least 25+ years old, so it's not like the price point reflects a modern state of the art facility.

Lesson learnt: Don't worry about saving. Take that expensive trip. Deplete the cash reserves. If you have any inkling you'll end up in a nursing home, you won't need to worry about a will, as the only thing you'll pass on is a burial bill.

Hopefully no one interprets this rant the wrong way. The ability to make your loved ones a little bit comfortable at the end of life is worth everything you have. No one should ever expect, nor be given anything in life. You earn your way, by starting out with nothing, immediately going in debt, climbing out and becoming a successful member of society. That is the American Dream.

In many ways, inheritance is a corruption on society. It passes on the successes on one generation to another, only the receiving generation was not the creator of success, but merely a beneficiary. By removing the grit and hard work, and the sweat and blood, we create a lazy, privileged, and unmotivated culture.

Yet, the debt that is piled on now days is hard to overcome: rising costs for higher education, unaffordable health insurance with high deductibles, the cost of health care itself is through the roof (don't get ill or injured), being able to save for a down payment on a house is more challenging, as the cost of living pretty much eats up a month's income. Even regulatory barriers make entering many business markets a challenge.

At what point in time are the masses unable to pay their debts and earn their way? Schemes that deplete wealth, especially the middle class, should be very worrisome. Until the cost/income ratio is able to balance a bit, any help families can provide to one another is essential to creating members to society who will be able to pay their own way.