Archive for May, 2016

The Genworth LTC Cost of Care Survey…

May 30, 2016

…for 2016 has finally arrived.  About a month later than in previous years, but well worth waiting for.  There are many long term care cost studies out there, but this one, done annually by Genworth Financial for the past 13 years, is the most consistent & the most comprehensive.  I use it when making individual plan recommendations for clients.  What does this year’s survey tell us about care costs?

  1. The median cost of a Metro-Denver, CO nursing home private room has risen to $8,578 per month.  That is more than $100,000 per year…for one person!  But people who have planned for care do not often go to a nursing home.  They tend to remain in their own homes.  So why am I emphasizing this number?  Because at $24 per hour (the current Metro-Denver median) for a home health aide, $8,578 per month equates to about 12 hours per day of home care.  I know that you know this, but just in case: Half of the care providers charge more than the “median”, & half charge less than the median.  In this case, median gives a more accurate picture than an average would.  (Call me if you want to discuss.).
  2. For those who enjoy predicting the future, the 5-year compound annual rate of increase for a Metro-Denver nursing home private room has been 5%.  Metro-Denver home health aide hourly rates have increased 3% (compounded annually) over the same time period.
  3. Metro-Denver assisted living facility cost increases have taken a year off.  Compared to 2015, the monthly mean is unchanged at $4,250.  However when we look at the 5-year compound annual rate, it stands at 3%.  A monthly cost of $4,250 for assisted living is understated for most people as that represents the cost for room, board, & only basic assistance.  Most assisted living residents need additional days of help with bathing, help with taking medications, etc.  These additional services add to monthly cost.
  4. Adult Day Care: Metro-Denver adult day care charges have actually gone down, from a mean of $66.50 per day in 2015, to $65.00 per day in 2016.  The trend?  Actually flat (0% compound annual increase) over past five years.  Adult Day Care remains a bargain for those who can use it…$65 for an eight-hour day compared to $24 per hour X 8 hours = $192.
  5. Finally, how much money can be saved with a Metro-Denver nursing home semi-private room?  About $1,000 per month.  The 2016 mean charge in a nursing home semi-private room is about $7,559 per month compared with $8,578 per month (See item #1 above.) for a private room.  What do you give up to save $1,000 per month?  Instead of the privacy of having a room to yourself, you will have a roommate, or possibly a succession of roommates.

Not all of my readers live in Metro-Denver, so how do long term care service costs in Denver stack up against those in the U.S. as a whole?  The answer: Not surprisingly some care costs are higher & some are lower.  A Metro-Denver home health aide costs about $3.75 per hour more than the national mean…could be significant when you consider how many hours may be needed.  Adult Day Care costs about $65 per day in Denver compared to $68 per day nationally.  A Denver nursing home private room is $8,578 per month.  Nationally, the private room cost is $7,698 per month.  A nursing home semi-private room?  $6,844 per month nationally & $7,559 in Denver.

What do all these numbers really tell us?  First, your actual cost of care will depend upon the particular care provider you have chosen.  You may find a “bargain” facility, although you generally do get what you pay for.  With regard to home health aides: The above rates are for home health aides provided by home health care agencies (and thus employees of those agencies).  I urge you not to try to save a few dollars by going through a referral service or worse yet, hiring someone yourself.  Either way, you become the employer with all of the tax reporting, workers compensation, & lack of employee supervision risks that entails.

What else do these numbers say?  Long term care services are very, very expensive.  You must have a plan to pay for this care when you will need it.  Insurance may or may not be the best answer for your particular situation, but you must have a plan…and this article only addresses the financial costs of needing long term care services.  The family relationship cost can arguably be even greater than the financial cost, but that is a subject of another discussion.

As always, I welcome your feedback.  Please contact me with your questions & comments.


Disclaimer: This eNewsletter and all links to other sources should not be construed as tax or legal advice because they are neither. Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your attorney or tax advisor  for these matters.


© Raymond Smith, The Long Term Care Specialist, 2016