Yearly Long Term Care Costs Move Above $70,000 In 2006, According To Annual Benchmark Study By Genworth Financial
Additional New Polling Shows 65% Have No Long Term Care Plans
Richmond, VA - The average cost of long term care in nursing homes, assisted living facilities and in the home increased over the past year, with assisted living and in-home costs rising more sharply than nursing home care, according to Genworth Financial's annual "Cost of Care" survey. And, in the face of rising costs for all categories of long term care, Genworth found 65 percent of Americans surveyed in a new national poll admit to having made no long term care plans for themselves or a spouse.
The average annual cost for a private one-bedroom unit in an assisted living facility rose 7 percent from the 2005 survey, to $32,294, while the combined average hourly rate for a home health aide for in-home long term care spiked 13 percent to $25.32 per hour. The average annual cost for a private room in a nursing home rose modestly by 2 percent over last year to $70,912.
Genworth's annual benchmark study surveyed more than 9,000 nursing homes, assisted living facilities and home care providers for its annual comprehensive view of long term care expenses. Additional national polling about long term care by Public Opinion Strategies was conducted in February and March among 600 Americans aged 40 and older. The Cost of Care study and a summary of the national poll are posted on www.genworth.com.
Alaska and New York remained the highest-cost regions for nursing home care, while Louisiana, rural Missouri and Kansas were the lowest-cost regions. Cost of care in urban regions is, on average, 17 percent greater than in non-urban regions—a 5 percent increase over last year's regional findings.
"As the first wave of America's 77 million baby boomers head into retirement this year, it becomes more critical for Americans to seriously evaluate how they will maintain their lifestyles as we live well into our 80's, 90's and beyond, " said Buck Stinson, president of Genworth's long term care insurance business. "It's good news that the typical steep gains in nursing home costs have moderated this year. But the fact remains that most American households remain unprotected from the costly health challenges that come with greater longevity."
According to the national survey by Public Opinion Strategies, 65 percent of Americans admit to having made no long term care plans for themselves or a spouse.
The poll also revealed most individuals recognized the need to prepare for the cost of long term care, but were largely unprepared. Many Americans surveyed also wrongly believed they had insurance protection, felt that their savings would be adequate to cover long term care costs, and incorrectly believed that Medicare would cover long term care costs.
Following are key findings from the Genworth "Cost of Care" survey, broken out by major category.
- Nursing Homes: The average annual national cost of a private room in a nursing home is $70,912, or $194 per day, reflecting a 2 percent increase over 2005 rates of $190 a day. This remains the most costly care option.
- Assisted Living: A private one-bedroom unit in an assisted living facility has an average annual cost of $32,294 — a 7 percent increase over 2005. Connecticut (Bridgeport area) has the highest annual cost at $57,566, while North Dakota and Arkansas were lowest at about $21,000.
- Home Care: The average hourly rate for home health aides across all different provider types was $25.32, a 13 percent increase versus $22.43 a year ago. For homemaker services, non-certified, licensed providers had hourly rates averaging $17.73, versus $16.84 a year ago.
Genworth Financial commissioned CareScout to conduct its annual Cost of Care survey. Research was conducted during January and February 2006. The survey included feedback from more than 25,000 providers in order to complete more than 9,000 surveys of nursing homes, assisted living facilities and home care providers in all 50 states and the District of Columbia.
SOURCE: Genworth Financial