The Cost of Long-Term Care

Not all care is created equal and it certainly does not cost the same when looking at nursing home vs. assisted living vs. home care and other choices. The care need will of course depend on the individual, and the needs may change over time due to availability of family, a particular illness or an additional injury therefore changing the type of care. As the needs change, so do the costs for care.

So, what does care cost? It can vary by state and facility and agency and the level of care needed, and more.

Genworth looks at the cost of care annually and also puts together trends and insights based on gathering this data since 2004. “From 2004 to 2020, the cost for facility and in-home care services has risen on average from 1.88% - 3.80% per year,” Genworth states on their website. “That’s an increase of $797 annually for home care and up to $2,542 annually for a private room in a nursing home.”

More recently, Genworth looked at cost increases during the pandemic and found that labor shortages, the additional cost of PPE (personal protective equipment such as face masks), and wage pressures were among the issues affecting costs of care.

Their most up-to-date research shows that the national hourly cost for what they call a “home care homemaker” (to differentiate from a medical-based home health aide) is the lowest cost of other care options they track at $17 to $33 per hour.

Leading Age, an organization that represents nonprofit aging services providers and others, did research that found the cost of staying home as people age—also called “aging in place”—may save money for families, governments, and health systems.

“Drivers of the Cost of Care”

In 2020, Genworth did a special study, “Drivers of the Cost of Care” to gain insights into the cost of care as well as how the pandemic was affecting costs.

What they found was, “increasing demand and strained supply are driving up costs.” Specifically, 92% of all participants [in the study] see demand for homecare services increasing and 54% cited “shortage of skilled labor” as the main driver of increased rates.

Also, the pandemic made homecare more desirable and those surveyed said they found themselves busier in 2020 than in 2019, according to Genworth. The demand for homecare was the largest percentage at 92% of all care services seen to see increased interest.

Wage increases are a topic in all industries currently, not just aging care services, and as wages go up, so too might the costs for goods and services. This Genworth report found that their study participants—made up of industry experts—anticipate rates to go up 4-5% for clients in the next six months and beyond.

The study found that 84% of companies absorbed the extra cleaning supplies costs and only 1% passed those costs directly to clients.

Mindful of the need for many people to save money on care costs, some providers got creative and offered reduced minimum hours or flat rates, free assessments, and more options to make sure people did not go without care completely if cost was an issue.

Yes, Costs Are Increasing

Despite these efforts, the costs for home care and other aging care services have been incrementally rising in recent years, Genworth found.

In 2019 to 2020, the costs for non-medical home care saw a 4.44% increase, medical home health services had a 4.35% increase, assisted living had a 6.15% increase, and adult day care experienced a decrease of -1.33%. Nursing home care (both semi-private or private room) remain the most expensive options for long-term care of nearly double the cost of in-home and they saw increases of 3.24-3.75% from 2019 to 2020.

When making a long-term care choice, research all options and what is included in them. For example, many facilities do not offer one-on-one care so that may become an additional cost if a loved one needs personalized care for safely bathing or going on outings. Also, talk to the health care provider of your loved one to understand what future care needs may arise and investigate how to bridge the gaps and transitions for the best care and manageable costs.

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