The cost of long-term care services increased across all
provider types in 2021 and increased more substantially for certain
settings, according to Genworth’s 18th annual Cost of Care Survey.
The most substantial increases occurred in home health aide and
homemaker services costs. The core driver of increases in the costs
of care services remains the relationship between the supply of
professional labor and the immense—and growing—demand of an aging
society. While variances exist across the country and between urban
and rural areas, wages are rising for care professionals, through
legislative measures in some regions and because of competition for
workers across industries. COVID-19 is also a contributing factor
to cost increases, given increased usage of personal protective
equipment (PPE), enhanced safety training, and additional
management of regulatory compliance; however, those costs are
expected to dissipate over time.
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Even as costs rise, research indicates that home-based care
remains the preferred choice for families1. Engaging home care
professionals, who can monitor and facilitate safe and healthy
behaviors, may increase the chances that an aging individual can
stay at home.
To explore median Cost of Care data by city, state or ZIP
Code, to find charts showing trends since 2004, and to access lists
of states ranked in order of care costs, visit
www.genworth.com/costofcare.
The 2021 survey reports that the cost of care services has
increased as follows:
- Assisted living facility rates increased by 4.65% to an
annual national median cost of $54,000 per year.
- The cost of a home health aide, which includes
“hands-on” personal assistance with activities such as bathing,
dressing, and eating, has increased 12.5% to an annual median cost
of $61,776.2 Homemaker services, which include assistance
with “hands-off” tasks such as cooking, cleaning, and running
errands, have increased 10.64% to an annual median cost of
$59,4882.
- The national annual median cost of a semi-private room in a
skilled nursing facility rose to $94,900, an increase of 1.96%,
while the cost of a private room in a nursing home increased
2.41% to $108,405.
While price increases compared to last year, especially for
home-based services, are significant, over the last five years, the
average annual increase for these services has been in the 2% to 6%
range.
“The Cost of Care Survey has once again underscored the
importance of planning ahead for long-term care costs and
highlighted the need to consider where and how a person wants to
receive care,” said Brian Haendiges, President and CEO, Genworth
U.S. Life Insurance. “Further, our Beyond Dollars research shows
that having a long-term care plan can help alleviate some of the
emotional, financial, and physical stress of finding care for a
loved one. Genworth is working to provide people with the products,
services, and solutions to help navigate the challenges of
aging—and our annual Cost of Care Survey and the accompanying
interactive website are incredibly useful tools to help families
assess care options as well as the costs associated with those
options. It is a great first step to making a plan in advance of
when you will need it.”
Why Costs Are on the Rise
Since Genworth started tracking the cost of care in 2004, the
cost for long-term care services has been on the rise, driven by
supply and demand. Every day until 2030, 10,000 Baby Boomers will
turn 654 and seven out of ten of them will require long-term care
services and support at some point5. The level of care needed by
this rapidly aging population has itself increased over the years6.
The high turnover rate and insufficient supply of professionals to
meet this growing demand pre-date the COVID-19 pandemic7, but are
now amplified as those providing care on the frontline must
consider their own risk of exposure against increasing
opportunities for competitive salaries, training, and advancement
in alternative lines of work.
“Even more than in prior years, the increased demand for labor
and the current national labor shortage have made it more difficult
to hire and retain long-term care professionals,” said Haendiges.
“Those challenges are coupled with the broader trend of growing
wages and increases in the cost of doing business associated with
regulatory, employee certification, and equipment costs, which have
all been exacerbated by the pandemic.”
“There is fierce competition for a limited number of care
professionals, and many are leaving the industry in pursuit of
higher paying jobs or because of concerns about potential exposure
to COVID-19 while on the job. The costs of recruiting, retaining,
and training new care professionals is likely to remain high as we
approach 2023,” Haendiges said.
While labor costs are likely to remain high, conversations with
care services providers indicate that elevated costs associated
with PPE and other COVID-19 protocols such as testing, vaccination
status tracking, and quarantining may subside as we make continued
progress on reducing COVID-19 case numbers. However, it is likely
that wide variability in care costs for markets across the U.S.
will continue due to state and local regulations, demographics, and
population shifts.
Elevating the Value Proposition for Home Care
In a conversation with Jeff Huber, President of Honor Technology
and Chief Executive Officer of its subsidiary Home Instead, Inc.,
which is the leading global provider of home care services for
older adults, Huber acknowledged that while labor costs have been a
key driver of home care cost increases, the same trend has led to
an elevation of the home care profession and helped demonstrate the
integral role care professionals play in supporting capacity across
the healthcare ecosystem. Huber says that higher wages are bringing
compensation in the industry more in line with where it should be,
given the demands of the job and the significant value that care
professionals provide to care recipients and their loved ones.
“The pandemic has shown us that home is the safest place to care
for people,” said Huber. “As our population ages and more people
require long-term care, it is clear that the most scalable,
comfortable, and safest solution is home-based care.” Huber added
that care professionals can help their clients adhere to a
medication regime, combat loneliness, stay better nourished and
hydrated, and provide social and mental engagement, leading to
better health outcomes. “We are working to enhance the perception
of professional caregiving and elevate it as a vocation of the
future, with increased training and education standards to ensure
consistency and accountability across the industry.”
While costs have risen, Huber stressed how organizations like
his are leveraging technology platforms and centralized
administrative teams to reduce costs associated with scheduling,
coordination, billing, payroll, recruiting, and training. “We’re
implementing ways to really streamline operations so we can be as
efficient as possible to provide as much value to the client as
possible for the right price point,” he says.
Caring for people in their homes frees up capacity in hospitals,
reducing admissions and readmissions, as well as overall usage of
healthcare infrastructure. Better incorporating home care into the
broader healthcare ecosystem, especially when arranging for some
level of home care at the earliest signs of a loved one’s need, is
likely to help reduce overall costs and support better patient
outcomes.
Genworth’s Cost of Care Planning Resources
Genworth is committed to helping people learn about, understand
the challenges of, and appropriately plan for the cost of long-term
care services. The following are resources that can help with the
planning process:
- Cost of Care Survey tool, to help calculate the median cost of
long-term care services in your area, as well as trend charts and
tables ranking states from the highest to lowest cost in each care
category.
- Beyond Dollars research, which highlights how caregiving
impacts families, communities, and society.
- Guides to understanding Medicare and Medicaid.
- Conversation starters to help begin the discussion with your
loved ones about potential long-term care needs and issues with
aging.
- In-person and online simulations and videos to help people
understand the potential physical effects of aging.
- Information about paying for long-term care services for
yourself or a loved one.
- Stories from real families about their experiences with long
term care.
About Genworth’s 18th Annual Cost of Care Survey
Genworth’s annual Cost of Care Survey, one of the most
comprehensive studies of its kind, contacted more than 67,000 long
term care providers nationwide to complete almost 15,000 surveys
for nursing homes, assisted living facilities, adult day health
facilities and home care providers from June to November 2021. The
survey includes 437 regions based on the Metropolitan Statistical
Areas, defined by the Office of Management and Budget as a core
area containing a substantial population nucleus, together with
adjacent communities having a high degree of economic and social
integration with that core. However, due to statistical variance
actual costs for long-term care services may differ from the
projected cost based on ZIP Code or location. 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 provider
of products, services and solutions that help families address the
financial challenges of aging. Headquartered in Richmond, Virginia,
we apply our nearly 150 years of experience each day to helping
people navigate caregiving options and fund their long term care
needs. Genworth is also the parent company of publicly traded Enact
Holdings, Inc. (Nasdaq: ACT), a leading U.S. mortgage insurance
provider. For more information on Genworth, please visit
https://www.genworth.com/. From time to time Enact separately
releases financial and other information about its operations. This
information can be found at https://ir.enactmi.com/.
1 Genworth Beyond Dollars 2021
(https://pro.genworth.com/riiproweb/productinfo/pdf/682801BRO.pdf),
site accessed 1/25/22. 2 Based on 44 hours per week for 52 weeks. 3
Based on 44 hours per week for 52 weeks 4 ”2020 Census Will Help
Policymakers Prepare for the Incoming Wave of Aging Boomers”
(https://www.census.gov/library/stories/2019/12/by-2030-all-baby-boomers-will-be-age-65-or-older.html),
site accessed 1/25/22. 5 2021 U.S. Department of Health and Human
Services
(https://acl.gov/ltc/basic-needs/how-much-care-will-you-need), site
accessed 1/25/22. 6 Genworth Beyond Dollars 2021
(https://pro.genworth.com/riiproweb/productinfo/pdf/682801BRO.pdf),
site accessed 1/25/22. 7 2020 “The Ballooning Costs of Long Term
Care,” American Action Forum,
(https://www.americanactionforum.org/research/the-ballooning-costs-of-long-term-care/),
site accessed 1/25/22.
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version on businesswire.com: https://www.businesswire.com/news/home/20220216005083/en/
Media Contact: Danielle Bolt Danielle.bolt@genworth.com 355201
02/11/22
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