March 2012 Cost of Care Survey (Genworth)

This latest, by Genworth Financial, validates the recent Met Life Mature Market Institute annual cost of care survey.  While more or less confirming the earlier reported numbers, the Genworth study provides more realistic assisted living costs.

Nursing Home (private room).  National: $222/day, $6,753/month, $81,030/year.  Metro-Denver: $237/day, $7,194/month, $86,323/year.

Nursing Home (semi-private room).  National: $200/day, $6,083/month, $73,000/year.  Metro-Denver: $220/day, $6,677/month, $80, 118/year. 

Assisted Living.  National: $3,300/month, $39,600.  Metro-Denver: $3,948/month, $47,370/year.

Home Health Aide.  National: $19/hour.  Metro-Denver: $22/hour.

Homemaker/Companion Care.  National: $18/hour.  Metro-Denver: $21/hour.

Adult Day Care (8-10 hours).  National: $61/day.  Metro-Denver: $72/day.

We know that inflation has been driving the cost of long term care services upward.  The planning question is: “by how much?”  Genworth Financial has been tracking the cost growth rates.  The average annual compound rates of increase for the past five years are as follows:

Nursing Home (private room).  National: 4%.  Metro-Denver: 3%.

Nursing Home (semi-private room).  National: 4%.  Metro-Denver: 4%

Assisted Living.  National: 6%.  Metro-Denver: 4%.

Home Health Aide.  National: 1%.  Metro-Denver: 1%.

Homemaker/Companion Care.  National: 1%.  Metro-Denver: 1%.

Why have home health aide and homemaker/companion care costs been flat over the past five years?  The cost of these services is made up almost entirely of labor.  There continues to be much relatively low-cost available labor.  Many people (including myself) believe that with the aging of America, there will be less available labor at the same time that demand for long term care services will increase.  Thus my prediction is future long term care service costs will increase at a greater rate than we are experiencing today.  This will be particularly true for home care.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term insurance policies vary from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2012