Costs associated with the long-term care industry show a split personality: while facilities like nursing homes and assisted living have grown more expensive over the past year, the costs of home-based care have remained relatively stagnant. The question is: Will costs shift the choices that individuals and families make about their long-term care plans?
The Genworth Financial 2011 Cost of Care Survey analyzed data from more than 15,500 long-term care providers, covering over 430 distinct regions nationwide to paint a national picture of the financial movements associated with the various service providers and offerings available to adults, seniors and families. What it found was a dichotomous picture of cost trends.
Overall, two-thirds of adults over 65 will require some type of long-term care option, according to research. And the majority of those requiring long-term care will pay through private means.
Nursing Home Rates
The average daily rate to live in a nursing home chugged forward at more than 5 percent between 2010 and 2011, landing at $193 per day for a semiprivate room (+5.7%) and $213 per day for a private room (+5.1%). Genworth, which is tracking the long-term care industry for the eighth consecutive year, found that the average annual cost of a nursing home has increased roughly 30 percent since 2005, from $60,225 that year to a high of $77,745 in 2011.
Assisted Living Rates
Meanwhile, assisted living has seen a year-to-year increase as well, though not as drastic as the nursing home sector in this particular year. The average monthly cost of assisted living stands at $3,261, which marks a 2.4 percent increase from 2010. Yet between assisted living and nursing homes, the former has witnessed a more robust cost increase over the past six years, with a 6 percent annual growth rate vs. a 4.5 percent growth rate for nursing homes.
Yet today there may be a wider chasm between pricing options at assisted living facilities than before. “Over the last decade, assisted living facilities have continued to adapt to the wide range of care needs presented by our growing elder population. Many facilities now provide services to residents who need continual care or supervision, while still providing a lower level of care to healthier individuals,” says the study. “As the range of prices becomes broader, so does the range of monthly costs.”
Home Care Rates
On the other side of the aisle is home care, a specialty encompassing adult day health care, home health aide services, and nonskilled care. The home care category did not witness any growth associated with its costs between 2010 and 2011, and the annual growth rates over the past six years are paltry – 2 percent for nonskilled care and 1.4 percent for home health aide services.
In terms of rates, the average hourly rate for a home health aide stands at $19 today, a small increase from the $17.50 average hourly rate in 2005. The minor increase in costs is attributed to increased competition among agencies, the wide availability of unskilled labor, and the avoidance of costs associated with the upkeep of a standalone healthcare facility, according to the report.