RICHMOND, Va., Sept. 26, 2017 /PRNewswire/ -- For the 70 percent of people older than 65 who the experts say will need long term care at some point in their lives1, the costs just notched up again.
According to the Genworth 2017 Cost of Care Survey released today, the annual median cost of long term care services increased an average of 4.5 percent from 2016 to 2017, the second-highest year-over-year increase for nursing homes and home care since the study began in 2004 and nearly three times the 1.7 percent U.S. rate of inflation.
Although the national median cost of receiving care rose considerably across all care options during the last 12 months, the increase was most pronounced for home health aides:
- Home health aide services, up 6.17% to $21.50/hour
- Homemaker services, up 4.75% to $21/hour
- Adult day health care services, up 2.94% to $70/day
- Assisted living facilities, up 3.36% to $123/day or $3,750/month
- Semi-private room nursing home care, up 4.44% to $235/day or $7,148/month
- Private room nursing home care, up 5.50% to $267/day or $8,121/month.
"The purpose of the study is to raise awareness about the cost of aging and help start the conversation about planning for long term care," said David O'Leary, president and CEO of Genworth's US Life Division. "We know that most people prefer to begin receiving long term care in their homes and the good news is that home care is still more affordable than nursing home care."
Labor shortage, tighter Medicare rules contribute to rising care costs
After remaining flat for some time, the cost of care at home has been escalating over the past two to three years. "That's due to an increase in labor costs, caused by a shortage of caregivers, increases in minimum wages in some states, and new health insurance and overtime requirements on the part of some providers," said Noreen Guanci, CEO and co-founder of Long Term Solutions, which provides care coordination services and nurse assessments for Genworth long term care insurance claimants.
Nursing home costs are increasing due to a combination of higher labor costs and tightened Medicare rules, which have resulted in shortened hospital stays and sicker patients being sent to rehab nursing homes for shorter stays, where costs have risen to cover those chronic medical conditions, she said.
Labor costs also figure into the rising cost of assisted living facilities. Room and board also has increased to accommodate residents who are sicker, but not sick enough to require nursing home care, and the luxurious accommodations that private payers demand, she said.
Most consumers assume government will pay for care
In a companion consumer sentiment survey conducted in conjunction with the 2017 Cost of Care Survey2, two-thirds of respondents said they expect government programs to cover all or part of their long term care costs. But those consumers may be surprised to learn the facts about these government programs.
Medicaid, the largest payor of long term care costs, has strict income and functionality requirements.3 Medicare will pay for limited nursing home care following a three-day hospital stay, but only if the patient has been formally admitted to a Medicare-certified nursing facility as an in-patient and not for observation, as is increasingly the case. Medicare also does not pay for home care, if skilled nursing care is not needed.
"Our population is aging, living longer, and not prepared," O'Leary said. "At Genworth we are focused on this issue every day and know first-hand how aging impacts families. Our hope is that people will take the first step by checking out our Cost of Care website or app to start the conversation about planning for their own long term care needs."
Resources for Understanding Care Financing Options
As costs continue to rise and traditional sources of government funding become more restrictive, consumers can take advantage of the following resources to educate themselves about the cost of care and alternative funding options:
- Download Genworth's Cost of Care App from iTunes.
- To explore long term care financing options, please visit genworth.com/longtermcare
- Beyond traditional insurance products, an underwritten single premium immediate need annuity can be purchased by older, less healthy Americans or their families to provide a guaranteed lifetime source of income that can be used for any purpose including, to pay for care or other expenses. Learn more here: www.genworth.com/products/immediate-need-annuity.html.
About Genworth's 2017 Cost of Care Survey
Genworth's annual Cost of Care Survey is one of the most comprehensive studies of its kind, covering more than 47,000 long-term care providers nationwide who complete surveys for nursing homes, assisted living facilities, adult day health facilities and home care providers. The survey includes 440 regions which include all Metropolitan Statistical Areas defined by the 2015 Office of Management and Budget. Genworth annually surveys the cost of long term care across the U.S. to help Americans plan for the potential cost associated with the various types of long term care available in their preferred location and setting. The survey also provides state-specific cost of care data for all 50 states and Washington, D.C., and comparison to the national median. CareScout®, part of the Genworth Financial family of companies, has conducted the survey since 2004. Located in Waltham, Massachusetts, CareScout has specialized in helping families find long term care providers nationwide since 1997. Genworth's 2017 Cost of Care Survey was conducted during May and June 2017.
About Genworth's Companion Long Term Care Consumer Sentiment Study
Genworth's companion Long Term Care Consumer Sentiment Study was conducted in collaboration with J&K Solutions, LLC. The data from this omnibus study was collected from an online survey from Sept. 1-4, 2017. A demographically representative sample of 1,200 adults ages 18 and older across the United States were surveyed, providing a 95 percent confidence level plus or minus 3%. The sample followed the framework of the U.S. Census data for age, gender, and region.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the "Investors" section of genworth.com. From time to time, Genworth's publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth Mortgage Insurance Australia Limited, separately release financial and other information about their operations. This information can be found at http://genworth.ca and http://www.genworth.com.au.
1 "Who Needs Care?" longtermcare.gov., U.S. Department of Health & Human Services, Feb. 21, 2017.
2 Genworth Cost of Care Companion Study, conducted Sept. 1-4, 2017.
3 "Medicare, Medicaid & More," longtermcare.gov, U.S. Department of Health and Human Services, Feb. 21, 2017.
SOURCE Genworth Financial, Inc.