Life care plan cost projection: a worked example
Answer in brief: on our synthetic case, 7 future care items over 40 years total $301,280 in today's dollars. With placeholder rates of 3% annual cost growth and a 4.5% discount rate, the present value is $224,457. With growth equal to discount, present value equals the undiscounted total. The rates move the answer more than any single item does.
Limits: Tool facts come from each vendor's own website, read on 2026-11-12; we did not test any product hands-on. The cost example is synthetic, and the rates in it are placeholders, not recommended growth or discount rates.
Synthetic case, no real patient. Evaluee A is 38, with a left below-knee amputation after a 2025 crash, healed, and walking with a prosthesis. Every provider note, page number, unit cost and rate on this page is made up for the arithmetic. Unit costs are placeholders, not prices; replace them with costs from a cited source for the evaluee's area.
The assumptions, stated up front
| Assumption | Value in this example | Where a real plan gets it |
|---|---|---|
| Projection horizon | 40 years (years 1 to 40) | Life expectancy opinion from a physician, or a published table such as the CDC's United States Life Tables, 2024 (NVSR volume 75, number 5) |
| Cost basis | Today's dollars, placeholder unit costs | Charge benchmarks, fee data or vendor quotes for the evaluee's area, with edition and date |
| Cost growth rate | 3% a year, placeholder | Forensic economist |
| Discount rate | 4.5% a year, placeholder | Forensic economist, often following jurisdiction rules |
| Timing | Costs fall at the end of each year | Economist's convention; mid-year is common too |
The future care rows (step 1)
Each row comes from a synthetic record recommendation (physiatrist p. 412, prosthetist p. 388 and 390, pain clinic p. 501), cited the way the record review page describes. The lifetime column counts occurrences, not years: the prosthesis is first replaced in year 4, then every 4 years through year 40, which is 10 replacements.
| Item | Basis (synthetic) | Per occurrence | Schedule | Times | Lifetime |
|---|---|---|---|---|---|
| Physiatry, 2 visits at $250 | p. 412, "twice a year" | $500 | Yearly, 1 to 40 | 40 | $20,000 |
| Prosthetist, 4 visits at $150 | p. 388, "quarterly checks" | $600 | Yearly, 1 to 40 | 40 | $24,000 |
| Prosthesis replacement | p. 388, "replace about every 4 years" | $18,000 | Every 4 years, 4 to 40 | 10 | $180,000 |
| Liners, 2 at $600 | p. 390, "2 liners a year" | $1,200 | Yearly, 1 to 40 | 40 | $48,000 |
| PT initial course, 12 at $140 | p. 412, "12 visits" | $1,680 | Year 1 only | 1 | $1,680 |
| PT with each new socket, 6 at $140 | p. 412, "6 visits with each new socket" | $840 | Every 4 years, 4 to 40 | 10 | $8,400 |
| Gabapentin, $40 a month | p. 501, "continue long term" | $480 | Yearly, 1 to 40 | 40 | $19,200 |
| Total | $301,280 |
Left out on purpose: a revision surgery the surgeon wrote "may need in future" (synthetic p. 455). "May" is possible, not probable, so it is listed in the plan as a possibility without a cost in the total.
Growing and discounting each row (step 2)
Each cost is grown from today's dollars to the year it falls due, then discounted back to today. For a cost C falling at the end of year t, with growth g and discount d:
Present value = C × (1 + g)t ÷ (1 + d)t
With g = 3% and d = 4.5%, every year's factor is (1.03 ÷ 1.045)t. The ratio 1.045 ÷ 1.03 minus 1 is the net discount rate: 1.456% here. The same plan can be priced with the net rate alone, which is why economists often report it.
| Item | Today's $ | Future $ at 3% growth | Present value at 4.5% |
|---|---|---|---|
| Physiatry follow-up | $20,000 | $38,832 | $15,078 |
| Prosthetist visits | $24,000 | $46,598 | $18,093 |
| Prosthesis replacement | $180,000 | $365,130 | $132,772 |
| Liners | $48,000 | $93,196 | $36,187 |
| PT, initial course | $1,680 | $1,730 | $1,656 |
| PT with each new socket | $8,400 | $17,039 | $6,196 |
| Gabapentin | $19,200 | $37,278 | $14,475 |
| Total | $301,280 | $599,803 | $224,457 |
The prosthesis is 60% of the today's-dollar total and 59% of the present value. In a plan like this, the replacement interval is worth more of your time than any other assumption you control. Moving it from 4 to 5 years cuts the number of replacements from 10 to 8 and takes $36,000 off the prosthesis line alone, before the therapy tied to each new socket.
How much the rates move the total (step 3)
| Discount rate (growth 3%) | Net discount rate | PV, end of year | PV, mid-year |
|---|---|---|---|
| 3% | 0% | $301,280 | $301,280 |
| 4.5% | 1.456% | $224,457 | $226,086 |
| 6% | 2.913% | $172,525 | $175,019 |
A 3-point change in the discount rate moves this plan by $128,755. Moving every cost from the end of the year to mid-year moves it by about $1,600 to $2,500. When the economist's total and yours disagree by a lot, check the rates first and the timing convention second.
What AI can and can't do in this projection
- Can: find the 7 recommendations, their frequency and their pages; flag the "may need" revision as conditional; turn them into rows.
- Can't: set the 40-year horizon, choose the unit costs, decide the revision is excluded, or pick the growth and discount rates. A tool that returns a lifetime dollar figure without showing those inputs is hiding the 4 decisions that matter.
Rerun this example with your own rows on the present value calculator; it loads with these 7 items.
Questions about life care plan cost projections
Does a life care planner calculate present value?
Usually not. Most plans state costs in today's dollars, and a forensic economist applies growth and discount rates. Knowing the math lets you check the economist's total and answer questions about it.
What is a net discount rate?
The discount rate net of cost growth: (1 + discount) ÷ (1 + growth) minus 1. At 4.5% discount and 3% growth it is 1.456%. When growth equals discount, the net rate is 0 and present value equals the undiscounted total.
Why is the prosthesis first replaced in year 4, not year 1?
Because the synthetic evaluee already has a new prosthesis at the plan date. Starting a replacement schedule in year 1 would add a prosthesis the record doesn't support and overstate the plan by $18,000.