RICHMOND,
Va., September 26, 2017 – For the 70
percent of people older than 65 who the experts say will need long term care at
some point in their lives[1],
the costs just notched up again.
According to the Genworth 2017 Cost of Care Survey released
today, the annual median cost of long term care services increased an average
of 4.5 percent from 2016 to 2017, the second-highest year-over-year increase
for nursing homes and home care since the study began in 2004 and nearly three
times the 1.7 percent U.S. rate of inflation.
Although the national median cost of
receiving care rose considerably across all care options during the last 12
months, the increase was most pronounced for home health aides:
- Home
health aide services, up 6.17% to $21.50/hour
- Homemaker
services, up 4.75% to $21/hour
- Adult
day health care services, up 2.94% to $70/day
- Assisted
living facilities, up 3.36% to $123/day or $3,750/month
- Semi-private
room nursing home care, up 4.44% to $235/day or $7,148/month
- Private
room nursing home care, up 5.50% to $267/day or $8,121/month.
“The purpose of the study is to raise
awareness about the cost of aging and help start the conversation about
planning for long term care,” said David O’Leary, president and CEO of
Genworth’s US Life Division. “We know that most people prefer to begin
receiving long term care in their homes and the good news is that home care is
still more affordable than nursing home care.”
Labor shortage,
tighter Medicare rules contribute to rising care costs
After remaining flat for some time,
the cost of care at home has been escalating over the past two to three
years. “That’s due to an increase in labor costs, caused by a shortage of
caregivers, increases in minimum wages in some states, and new health insurance
and overtime requirements on the part of some providers,” said Noreen Guanci,
CEO and co-founder of Long Term Solutions, which provides care coordination
services and nurse assessments for Genworth long term care insurance claimants.
Nursing home costs are increasing due
to a combination of higher labor costs and tightened Medicare rules, which have
resulted in shortened hospital stays and sicker patients being sent to rehab
nursing homes for shorter stays, where costs have risen to cover those chronic
medical conditions, she said.
Labor costs also figure into the
rising cost of assisted living facilities. Room and board also has increased to
accommodate residents who are sicker, but not sick enough to require nursing
home care, and the luxurious accommodations that private payers demand, she
said.
Most consumers
assume government will pay for care
In a companion consumer sentiment
survey conducted in conjunction with the 2017 Cost of Care Survey[2],
two-thirds of respondents said they expect government programs to cover all or
part of their long term care costs. But those consumers may be surprised to
learn the facts about these government programs.
Medicaid, the largest payor of long
term care costs, has strict income and functionality requirements.[3] Medicare
will pay for limited nursing home care following a three-day hospital stay, but
only if the patient has been formally admitted to a Medicare-certified nursing
facility as an in-patient and not for observation, as is increasingly the
case. Medicare also does not pay for home care, if skilled nursing care
is not needed.
“Our population is aging, living
longer, and not prepared,” O’Leary said. “At Genworth we are focused on this
issue every day and know first-hand how aging impacts families. Our hope is
that people will take the first step by checking out our Cost of Care website or app to start the
conversation about planning for their own long term care needs.”
Resources for
Understanding Care Financing Options
As costs continue to rise and traditional sources of government funding become more restrictive, consumers can take advantage of the following resources to educate themselves about the cost of care and alternative funding options:
As costs continue to rise and traditional sources of government funding become more restrictive, consumers can take advantage of the following resources to educate themselves about the cost of care and alternative funding options:
- Download
Genworth's Cost of Care App from iTunes.
- To
explore long term care financing options, please visit genworth.com/longtermcare
- Beyond
traditional insurance products, an underwritten single premium immediate
need annuity can be purchased by older, less healthy Americans or their
families to provide a guaranteed lifetime source of income that can be
used for any purpose including, to pay for care or other expenses.
Learn more here: www.genworth.com/products/immediate-need-annuity.html.
About Genworth’s
2017 Cost of Care Survey
Genworth’s annual Cost of Care Survey
is one of the most comprehensive studies of its kind, covering more than 47,000
long-term care providers nationwide who complete surveys for nursing homes,
assisted living facilities, adult day health facilities and home care
providers. The survey includes 440 regions which include all Metropolitan
Statistical Areas defined by the 2015 Office of Management and Budget. Genworth
annually surveys the cost of long term care across the U.S. to help Americans
plan for the potential cost associated with the various types of long term care
available in their preferred location and setting. The survey also
provides state-specific cost of care data for all 50 states and
Washington, D.C., and comparison to the national median. CareScout®,
part of the Genworth Financial family of companies, has conducted the survey
since 2004. Located in Waltham, Massachusetts, CareScout has
specialized in helping families find long term care providers nationwide since
1997. Genworth’s 2017 Cost of Care Survey was conducted during May and June
2017.
About Genworth’s
Companion Long Term Care Consumer Sentiment Study
Genworth’s companion Long Term Care
Consumer Sentiment Study was conducted in collaboration with J&K Solutions,
LLC. The data from this omnibus study was collected from an online survey from
Sept. 1-4, 2017. A demographically representative sample of 1,200 adults
ages 18 and older across the United States were surveyed, providing a 95
percent confidence level plus or minus 3%. The sample followed the framework
of the U.S. Census data for age, gender, and region.
About Genworth
Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.
[3]“Medicare, Medicaid & More,” longtermcare.gov, U.S. Department of Health
and Human Services, Feb. 21, 2017.
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