Assisted Living Sees Fastest Cost Growth Among Long Term Care Settings
The need for long term care continues to grow throughout the United States and the cost of that care is following suit. Genworth Financial’s annual Cost of Care Survey breaks down prices of the different long term care options available. According to the survey, assisted living facilities are experiencing the quickest rise in cost among the various setting options for care.
Facility Based Long Term Care
“Overall, while the cost of care among all care providers has steadily increased, the cost of facility-based providers has grown at a much greater rate than that for home care,” Genworth notes in the most recent report.
The Long Term Care Insurance carrier has published a Cost of Care Survey every year since 2004 to help provide consumers with vital information that can help them make the most informed decision possible about their long term care situation. Recent surveys have found that most Americans are uneducated about the risk of long term care.
Some even think the newest healthcare law covers the cost, but this is not the case. Genworth’s report helps people better understand the huge financial cost associated with long term care in hopes that they will use that information to then incorporate the risk into their retirement planning.
While nearly every care setting saw an increase in cost, assisted living facilities have seen the highest. Assisted living facilities are long term care facilities that provide the basics for residents, but also has medical personnel on staff in case any of the residents experiences a medical emergency. They are different from nursing homes in that nursing homes typically involve around the clock care and are much more medically centered.
The median monthly cost of a private room in an assisted living facility is $3,500. This cost represents a 1.45% increase from 2013 and a 4.29% compound annual growth rate over the past five years.
Private rooms at nursing homes have also grown rapidly in cost, just behind assisted living facilities. The cost increased 4.35% from 2013 to $240 for one day of care or $87,600 annually. This specific care setting has seen a 5 year compound growth rate of 4.19% since 2009. Addressing these costs in the public arena is crucial to ensuring Americans are prepared to pay for their health care bills during retirement. As of now, very few are.
Part of Retirement Planning
Only around 10% of seniors have Long Term Care Insurance, the kind of insurance that helps cover the costs associated with long term care. Without this kind of insurance, people typically rely on their retirement fund to pay for long term care. Given the astronomical (and growing) cost, it makes sense that most people can’t afford to pay for care for very long without having a hugely negative impact on their nest egg. Long Term Care Insurance allows you to shield your nest egg from the full price by helping cover the cost of care being received.