While long term care costs continue to rise nationally, the cost for in-home care is rising at a much slower pace according to an annual survey from Genworth Financial.
The cost to receive care in the home has risen at an annual rate of just 1.7 percent over the past five years, compared to increases of 6.7 percent for assisted living facilities, and 4.5 percent for a private room in a nursing home, over the same period.
Another survey conducted earlier this year found that when asked to identify the setting most preferred to receive long term care, 78 percent chose the home, 18 percent chose assisted living, and only 2 percent selected a nursing home. For most people, the ability to live independently is critical to maintaining quality of life.
“Long term care is not just about nursing homes anymore. Care options have expanded dramatically over the past several years to include a far greater choice of settings that reflect the ways in which individuals prefer to receive care,” said Buck Stinson, President, U.S. Life Insurance Products at Genworth. In fact, 73% of Genworth’s initial benefit claims are for home health care.
The challenge of how to pay for the care continues to be an issue consumers need to consider. With median costs ranging from $38,220 to $75,190 per year depending on the type of care needed, finding a way to pay for long term care can be a challenge for many people. As an example, assuming the average stay in a nursing home is three years, costs can easily surpass $225,000 for the entire long term care event.
In contrast, rates charged by home care providers for “non-skilled” services have not experienced significant growth over the past five years. The national hourly private pay median rate charged by a licensed home health agency for a home health aide was $17.50 in 2005, while the 2010 hourly rate has gradually risen to $19. Home care rates have remained in check partly due to increased competition among agencies, the availability of unskilled labor, and the absence of costs associated with maintaining stand-alone health care facilities.