LTC Costs Continue to Rise

For the eighth consecutive year, Genworth Financial has surveyed long term care service providers throughout the U.s. Genworth’s survey includes 437 regions that cover all metropolitan statistical areas defined for the 2010 U.S. census.

Overall, the study shows the cost of care among facility-based providers has steadily increased. For example, in 2005 the median annual rate for a private nursing home room was $60,225, compared with the 2011 median annual rate of $77,745. This means Americans can expect to pay approximately $17,520 more per year today for a nursing home than they had to pay in 2005. This increase represents a 4.35 percent compound annual growth rate over that period.

In contrast to facility-based care, rates charged by home care providers for “non-skilled” services have remained relatively flat over the past six years. For example, whereas the national hourly private pay median rate charged by a licensed home health
agency for a home health aide was $17.50 in 2005, the 2011 hourly rate has only slowly crept up to $19. The historical compound annual growth rate for this type of care service has been only 1.38 percent over a six-year period. Home care rates have remained flat in part because of increased competition among agencies and the availability of unskilled labor, and by avoiding costs associated with maintaining stand-alone health care facilities.

The trend in pricing among assisted living facilities has changed considerably. 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.

As the range of services becomes broader, so does the range of monthly costs. In the Genworth survey, assisted living survey participants were asked to provide their monthly rates for both the lowest level of care and the highest level of care. The aggregated survey results use the average of these ranges.

Summary of 2011 Findings                                        Nat'l Median Daily Rate    +/1 Over 2010        6-Year Annual Growth

Homemaker Services (Licensed) Provides “hands-off”    $18                              0%                        1.98%
care such as helping with cooking and running
errands. Often referred to as “Personal Care
Assistants” or “Companions.” This is the rate charged
by a non-Medicare certified, licensed agency.

Home Health Aide Services (Licensed) Provides             $19                              0%                        1.38%
“hands-on” personal care, but not medical care,
in the home, with activities such as bathing,
dressing and transferring. This is the rate charged
by a non-Medicare certified, licensed agency.

Adult Day Health Care                                                $60                              0%                        NA
Provides social and other related support services
in a community-based, protective setting during
any part of a day, but less than 24-hour care.

                                                                              Nat'l Median Monthly Rate +/- Over 2010        6-Year Annual Growth

Assisted Living Facility (One Bedroom/Single                $3,261                            2.39%                  5.99%
Occupancy) Provides “hands-on” personal care
as well as medical care for those who are not able
to live by themselves, but do not require constant
care provided by a nursing home.

Nursing Home (Semi-Private Room)                            $193                               5.7%                   4.52%           
Provides skilled nursing care 24 hours a day.

Nursing Home (Private Room)                                    $213                               5.1%                   4.35%
Provides skilled nursing care 24 hours a day.