RICHMOND, Va., Oct. 16, 2018 /PRNewswire/ -- Living longer
has its advantages, but it also increases the likelihood of needing
long term care2, a proposition that is getting more
costly with every passing year. According to the
15th annual Genworth Cost of Care
Survey released today, the blended annual median cost of long
term care support services has increased an average of 3 percent
from 2017 to 2018, with some care categories exceeding two to three
times the 2.1 percent U.S. inflation rate.
The annual median cost of care now ranges from $18,720 for adult day care services to
$100,375 for a private room in a
nursing home. Between 2017 and 2018, assisted living
facilities increased the most at 6.67 percent, followed by a
semi-private room in a nursing home at 4.11 percent. Based on the
five-year compound average growth rate (CAGR), the largest increase
occurred within the nursing home facilities category at over 3
percent.
Topline Results from 2018 Cost of Care Survey
Category
|
Year Over
Year
Increase
|
Hourly
|
Daily
|
Monthly
|
Annually
|
5 YR
CAGR
|
Assisted
Living
Facilities*
|
6.67%
|
|
$132
|
$4,000
|
$48,000
|
3.00%
|
Nursing Home -
Semi Private
|
4.11%
|
|
$245
|
$7,441
|
$89,297
|
3.44%
|
Nursing Home -
Private
|
3.00%
|
|
$275
|
$8,365
|
$100,375
|
3.64%
|
Adult Day
Care
|
2.86%
|
|
$72
|
$1,560
|
$18,720
|
2.07%
|
Home Health
Aide
|
2.33%
|
$22
|
$138
|
$4,195
|
$50,336
|
2.51%
|
Homemaker
Services
|
0.24%
|
$21
|
$132
|
$4,004
|
$48,048
|
2.85%
|
*Referred to as Residential Care Facilities in California
"For the past 15 years, Genworth has been the leader in helping
families prepare for the potential of needing long term care by
providing our annual Cost of Care Survey and underscoring the
importance of planning ahead for these costs," said David O'Leary, President and CEO of Genworth's
U.S. Life Insurance division. "This year's study shows cost
increases across all care settings, costs that affect the economic
reality for individuals, families, employers and communities. We
strongly advocate people at all stages of life begin planning now
for the very real possibility of needing care as they grow older.
Starting a conversation about potential long term care needs and
the issues of aging isn't always easy. But honest conversations are
essential to making sure that people can live life on their own
terms as they grow older."
"The year-over-year cost of any kind of long term care is rising
quickly, with no sign of slowing down," said Gordon Saunders, Senior Brand Marketing Manager
at Genworth, who manages the Cost of Care Survey. "Increasingly,
people and their loved ones are finding that the cost of long term
care services is staggering and often they are unaware of it in
advance. Our mission is to help people who need care age on
their own terms and live their lives the way they want. We do
that by providing research and resources that can help educate
people about the cost associated with long term care well before
they need it. We hope these resources will encourage them to
start meaningful conversations with family and friends about their
care because to live well, we all must plan well."
Why Costs Are Rising
Several factors3 are driving up the cost of care
across all care options, including home care, which has increased
significantly over the past two to three years after remaining flat
for some time4:
- The shortage of skilled workers. It's a simple case of supply
and demand: With demand outpacing the supply of workers, caregivers
know they can demand more and companies are willing to pay more for
the best workers. Also, fewer caregivers mean more overtime, which
means consumers pay more for care.
- Higher minimum wages and changes in overtime pay rules.
- Difficulty attracting and retaining qualified workers.
- Business constraints facing home care agencies, such as
differing laws on certification of caregivers, compliance
obligations, razor-thin margins, balancing care quality and
costs.
- The increasing incidence of Alzheimer's Disease and dementia,
which is increasing the need for more specialized care – and higher
hourly wages.
- Aging Americans needing more specialized care, the result of
waiting too long to receive professional care. By then, the
diagnosis has progressed beyond the need for basic care to very
specialized and intensive levels of care, which is more
expensive.
"As the costs of labor and facilities rise, finding affordable
care options becomes much harder for caregivers and families
nationwide," said Jennifer Johnson
R.N., Clinical Director of CareScout®, which conducts the
Cost of Care Survey. "Most people prefer to receive care in their
homes, which poses the unique challenge of finding enough
caregivers to meet those needs. Simultaneously, at-home care
remains the most affordable option for patients. With the
continuing rise of care costs for both in the home and in care
facilities, the burden increasingly falls on family and friends to
find the means to afford care for their loved ones."
Findings Over 15-Year Life of Study
For 15 years,
Genworth has been studying the cost of care through its annual
survey, providing families with the information necessary to make
plans and decisions for how they want to receive and pay for care
as they grow older.
During the 15 years of the Cost of Care Survey, the cost of long
term care in assisted living facilities has increased 67 percent
and private nursing home rooms have increased 54
percent5. By comparison, a private nursing home
room now costs 1.6 times the national median annual household
income, which was $62,685 in
August 20186. While
facility costs have trended upwards, the annual cost of in-home
care has remained relatively flat over the life of the study. It is
only in recent years that home care costs have risen at a higher
pace than previous years, increasing 19 percent for a home aide and
26 percent for homemaker services since 2004.
"For many families, the cost of long term care is a significant
challenge that is already difficult to talk about and our Cost of
Care research continues to show that care across the nation isn't
becoming more affordable or accessible," said Saunders. "The key to
being able to handle a care event is to plan for the future. We've
had years of experience helping people to make decisions about
their future care and we want everyone to have the resources and
information to be able to plan for their best future so they can
live well."
Resources for Understanding Care Financing Options
We
believe people of all ages should understand the opportunities and
challenges associated with living longer in today's world. Planning
well now expands the choices available for care later as we grow
older. People of all ages can take advantage of the following
resources to educate themselves about the cost of care and
alternative funding options:
- Visit
https://www.genworth.com/aging-and-you/finances/cost-of-care.html
to learn more about the total cost of long term care in your area
and how costs have changed over time.
- 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 2018 Cost of Care Survey
Genworth's
annual Cost of Care Survey, one of the most comprehensive studies
of its kind, contacted more than 49,000 providers nationwide to
complete 15,000 surveys for nursing homes, assisted living
facilities, adult day health facilities and home care providers.
The survey includes 440 regions based on the Metropolitan
Statistical Areas, defined by the Office of Management and Budget,
and include approximately 85 percent of the U.S. population.
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. Genworth's 2018 Cost of Care findings also
highlight the 15 year tends in care costs as measured in the Cost
of Care data over the last 15 years. 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.
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.
From time to time, Genworth releases important information
via postings on its corporate website. Accordingly, investors and
other interested parties are encouraged to enroll to receive
automatic email alerts and Really Simple Syndication (RSS) feeds
regarding new postings. Enrollment information is found under the
"Investors" section of genworth.com. From time to time,
Genworth's publicly traded subsidiaries, Genworth MI Canada Inc.
and Genworth Mortgage Insurance Australia Limited,
separately release financial and other information about
their operations. This information can be found
at http://genworth.ca and http://www.genworth.com.au.
1 United States Department of Labor, Bureau of Labor
Statistics, accessed 10/03/18.
https://data.bls.gov/timeseries/CUUR0000SA0L1E?output_view=pct_12mths
2Recent research suggests that most Americans turning
age 65 will need long-term care services at some point in their
lives. Source: 2018 U.S. Department of Health and Human
Services (www.longtermcare.gov). November
14, 2017.
3Online discussions with long term care providers across
all care settings in key geographical locations, conducted for the
15th anniversary of Genworth's Cost of Care Survey by
J&K Solutions, LLC, September
2018.
4Genworth's Cost of Care Survey, conducted by
CareScout®, 2016-18.
5 Genworth's Cost of Care Surveys, conducted by
CareScout®, 2004-18.
6 Household Income Trends, August
2018, by Gordon Green and
John Coder, Sentier Research, LLC,
September 2018.
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SOURCE Genworth Financial, Inc.