An overall 5% increase in the average monthly cost of assisted living facilities, reported by the American Association for Long-Term Care Insurance (AALTCI) could be driving today’s aging generation to explore their options in the planning and funding of long term care.
Nearly 1 million aging Americans reside in assisted living facilities, but the vast majority plan to age in place. Additionally, the rising costs of the facilities and services are not an option for some seniors who have not made financial plans to live into their 80s and 90s, according to Jesse Slome, executive director of AALTCI.
“Assisted living is a wonderful option for the people who can afford it,” said Slome. “But you have a large generation of Americans that has no plan for living a long life. Most people don’t have a plan, so they stumble along. Those who have a plan, they have many options available to them.”
As an average monthly cost of $3,350 was reported, AALTCI reports that claims for nursing home care account for less than a third of last year’s newly opened claims.
Long-term care insurance, many seniors are realizing according to Slome, allows beneficiaries the option to stay out of assisted living facilities and receive more economical care in their homes. While the monthly cost of assisted living facilities saw the 5% increase, from 2006 to 2011, home health care saw just under a 1% annualized increase, according to Slome.
“People today want choice and control about where they are going to live as they age,” said Slome. “They want to be as independent as possible for as long as possible.”
In addition to the rise in monthly costs, AALTCI also found a wide range in the monthly rates assisted living facilities charge. Monthly rates in Kansas City alone vary by more than $3,000 according to the sourcebook.
While prices will inevitably continue to rise, according to Slome, the aging generation will continue choosing the long term care option that best matches their economic situation.
Written by Erin Hegarty