Photo: Ann, Flickr

There are many things to look forward to in the future, but there are plenty of things we worry about, too. Many people worry about their health and dread certain potential outcomes, such as becoming unable to care for themselves and perhaps ending up in a nursing home. That alone is an unpleasant thought, and nursing home costs can be another. The cost of staying in a nursing home can be high, but it might not hurt you quite as much as you think. 

Cost consciousness 
Let's review just how high the costs are, and then I'll offer some ways to help lower your total tab.

According to an annual survey by Genworth Financial, the national median cost for a semi-private room in a nursing home is $220 per day, or $80,300 per year. For a private room, it was $250 per day, or $91,250 per year. Both of those rates have averaged 4% annual growth over the past five years, exceeding the rate of inflation.

This seems worrying. After all, just five years in a private room comes to more than $450,000, enough to wipe out the savings of many Americans. And remember -- those numbers are national averages. In many states, it's even higher. In Connecticut, for example, just a semi-private room had a median cost of $400 per day, or $146,000 per year. Alaska's median cost per day was $771, or a whopping $281,415 per year. Ouch.

Some silver linings
Fortunately, many states feature lower-than-average rates, with Oklahoma, for example, costing just $60,255 ($165 per day) for a year in a private room. In Kansas, it's just $6,000 more than that. If you don't live in a low-cost state and don't want to move, you still have reasons not to stress over nursing home costs.

One reason is that the typical nursing-home resident doesn't stay too long. According to the American Association for Long-Term Care Insurance, a full third of residents stay in a nursing home for an average of less than three months and about 44% stay a year or less. Twelve percent stay from three to five years, with another 12% staying for five years or more.

Finally, know that the going rates in your region aren't necessarily what you'll pay. You may find a better-than-average rate. Or, you may be charged average rates but have some of the cost offset by insurance or tax breaks.

Home healthcare is a less expensive option for some. Photo:

Paying for nursing home care
There are a number of ways to cover or help allay the cost of nursing home care. One option is to buy long-term care insurance. Its cost has been soaring in recent years as insurers have had trouble turning a profit due to increasing healthcare costs, but it still might be an option. According to Michael Kitces of Pinnacle Advisory Group, the cost of a typical long-term care policy has risen about 70% over the past decade. Many insurers, such as MetLife and Prudential Financial, have exited the long-term care insurance business because of the cost hikes. However, if you begin buying when you're at the relatively young age of 40 or 50, you'll generally get offered the lowest rates. Note, however, that buying while you're young isn't a perfect solution, either, as you'll spend more years paying premiums and you'll be vulnerable to rate hikes for more years. 

Tax breaks may also offer some help. As the IRS explains on its website, "If you, your spouse or your dependent is in a nursing home and the primary reason for being there is for medical care, the entire cost including meals and lodging is a deductible medical expense." If the person is in the nursing home mainly for personal reasons, then only the medical care costs (and not meals or lodging costs) are deductible.

Another resource is Medicaid. It's certainly not the best-case scenario to spend so much on nursing home care that you're financially wiped out, but it won't leave you out on the street, either. As my colleague Chuck Saletta has pointed out, "Once your assets become nearly completely depleted, Medicaid will step in to cover your remaining long-term care costs. Not all nursing home facilities accept Medicaid, however, so you should make sure that yours does if you may need the help of Medicaid." He also noted that Medicaid will leave a spouse who is not in the nursing home with enough on which to live modestly. Medicare is generally not a better solution, as it doesn't cover much in the way of long-term care.

Of course, you might just plan to pay nursing-home costs out of pocket. It will be tough for many people, but many others can swing it -- particularly if you "self-insure" by socking away funds over many years earmarked for possible nursing-home use.

If you have a life insurance policy, you might see if you can use it to pay for nursing home costs. If you plan to buy a policy, perhaps aim to get one that will let you do so.

Veterans and their survivors might be able to tap the Department of Veterans Affairs Aid and Attendance program if they already qualify for a VA pension.

Finally, remember that, when you start having trouble caring for yourself, there might be less expensive options than a nursing home, at least for a while. An assisted-living facility might do (Genworth cited a national median annual cost of $43,200 for that), while home health aides cost a national median of about $20 per hour. Twenty hours per week of that would approach $21,000.

It's worth spending some time now thinking about how you would pay for nursing home costs -- or other long-term care costs, for that matter. A little planning now might prevent panic or desperation later.