As the cost of obtaining long-term care services in a retirement setting continues to rise dramatically, while the cost of at-home care continues has risen at a much lower rate.
According to an annual survey by Genworth Financial, rising prices for both assisted living facilities and nursing home costs are outpacing those of homemaker services and home health aides.
“There are many factors that go into rising care costs, from the number of available skilled professionals to real estate prices,” Pat Foley, Genworth’s president of distribution and marketing, said in a statement. “If you look at national private nursing home costs over the past 10 years that we’ve done this study, the median annual costs have gone up from $65,200 to $83,950, increasing at more than four percent a year. The better news is that costs for homemaker services and home health aides have remained relatively flat. Since 70 percent of Genworth’s first time long term care claimants choose in-home care, these costs have remained more manageable.”
Nationally, the 2013 median hourly cost of homemaker services and home health aide services is $18 and $19, respectively. Homemaker costs have risen just 1.4 percent since 2012 and 0.8 annually over the past five years. Home health aide services have risen 2.3 percent since 2012 and 1.0 percent annually over the past five years.
The costs to receive care in an assisted living facility are rising much faster. The median annual cost for care in an assisted living facility is $41,400. This represents an increase of 4.6 percent since 2012 and a 4.3 percent annual increase over the past five years. The comparable cost for a private nursing home room rose 3.6 percent from 2012 to 2013, to $83,950, or 4.5 percent annualized over the past five years.
“Since we first did this study, we have seen a steady move away from traditional nursing home care to less expensive options that include in-home care, assisted care facilities and adult day care. In addition to being the kind of care most people prefer to receive, the difference in the relative cost of these services versus private residential nursing care can be dramatic,” Bob Bua, Genworth vice president and business leader of its subsidiary, CareScout, said in a statement.
This is good news for those who may need help with their daily living activities but prefer to live in their own home, according to Roger Baumgart, chief executive officer of Home Instead Senior Care.
“We have never met a person who did not prefer to have care in their own home,” Baumgart said in a statement. “It’s encouraging to see that home care costs have grown more slowly compared to full service residential long term care expenses. The vast majority of Americans want to age in their own homes, but sometimes there are physical or cognitive issues that can make that difficult. Every day, we see the emotional and financial challenges that seniors and their caregivers and families face in making decisions about care. Genworth’s Cost of Care survey provides a wealth of data to help families work through the costs and begin the planning process for how they will care for their loved ones.”
Regardless of the kind of care a person might receive, it remains critically important to make a plan. Wendy Boglioli, Genworth’s national spokesperson, offers several tips on beginning the planning process:
• Close the Care Knowledge Gap. The more a person knows about the cost and impact of long term care choices, the more apparent it will become to start planning today.
• Build a Team. Just as a football head coach surrounds himself with savvy coordinators who are tasked with specific coaching duties, consumers should bring in outside professionals to fill in the long-term care gaps.
• Put It In Writing. It isn’t just identifying where the money is coming from. The plan should include a hardcopy and an electronic version of who your team is, their roles and contact information.
