Long-Term Care Costs Jump 25% Over 2004; Workforce
Shortage Fuels Continued Climb
Genworth Survey finds average annual cost for a week
in adult day health care facility is $15,236
April 30, 2008 - Not only has the cost of long-term
care in U.S. nursing homes, assisted living facilities and in the home
increased for the fifth consecutive year, but the nation faces an
impending shortage of direct-care workers, further driving up long term
care costs. Those are two of the key conclusions drawn from cost of care
research by
Genworth Financial (NYSE:GNW).
Sen. Kohl promises legislation to expand, train, and
support all sectors of the health care workforce, including doctors,
nurses, direct care workers, and family caregivers
Each year Genworth surveys the cost of care in more
than 10,000 nursing homes, assisted living facilities and home care
providers in all 50 states and 90 geographic regions including the
District of Columbia.
This year the survey adds adult day health care
findings. The most comprehensive cost analysis in the industry, it
surveys three times the number of providers and offers more regional
detail than similar studies, and is the only survey that provides
comparative data for the past five years.
This year, Genworths study found the price of most
long term care services are rising faster than inflation, and by 2050,
the nations bill for providing long term care services is expected to
top $379 billion. In 2008, the average annual price of a private nursing
home room reached $76,460 nationally more than one and a half times
the average annual household income in the U.S. of $48,2011. The most
preferred form of care is in the home, and the cost of home care
performed by a non-skilled home health aide remained flat in most
regions of the country.
This years
Cost of Care Survey is complemented by additional research released
today by Genworth entitled
A Workforce to Care for Our Aging. This study identifies an
imminent shortage of caregivers as the driver of increasing long term
care costs. By 2030, the number of Americans 65 years and older will
double. The U.S. will need to recruit 200,000 new direct-care workers
each year to meet future demand among our aging population.
Another challenge is the caregiver workforce is
dwindling as it is struggling to retain its existing workforce. The
turnover rate for paraprofessional long term care workers in the U.S. is
disproportionately high 13 to 18 percent higher than the overall labor
workforce and 20 percent higher than other service workers.
Unless something is done to directly address this
growing care gap, not only will paying for long term care be difficult
for many, but finding it may be as well, said
Buck Stinson, president of Genworth Financials
Long Term Care Insurance business.
With 78 million baby boomers set to retire in the
next few decades, America faces an impending workforce crisis in the
long term care industry that could strain the economy and negatively
impact millions of Americans and their families, he said. These are
serious problems that require collaborative, results-oriented
discussions among policymakers and stakeholders.
Key Cost of Care Findings
Following are key findings, broken out by major
category:
● Nursing Homes: The national average
annual cost of a private room in a nursing home is $76,460 or $209 per
day, a 17 percent increase over 2004 rates. This remains the most costly
option. The most expensive average per day room rate was found in Alaska
($515) and the least expensive average per day room rate was found in
Louisiana ($125).
● Assisted Living Facilities (ALF): A
private one-bedroom unit in an assisted living facility has an average
annual cost of $36,090 in the U.S., a jump of 25 percent since 2004. The
most expensive average unit was found in New Jersey ($4,921 per month)
and the least expensive average unit was found in Arkansas ($1,981 per
month).
● Home Care: Nationally, the average
hourly rate for a non-Medicare certified, state licensed home health
aide is $19.18, a cost that translates to $43,884 per year for 44 hours
per week of care. Thats only a 4 percent increase over the hourly rate
for a non-Medicare certified home health aide in 2004 of $18.43.
● Adult Day Health Care: First year
research findings indicate the average annual cost across the country
for five days a week in an adult day health care facility is $15,236.
The expense of just a few years of long term care
in a facility or at home can very quickly wipe out a lifetime of
savings, noted Stinson. As most Americans prefer care in their homes,
which puts a greater need on expanding home-based options, we must
encourage families to start talking about long term care today and to
incorporate it into their overall retirement strategy.
Regional Variations Abound
The cost of long term care varies widely by region,
with costs in urban areas averaging 16 percent more than non-urban
areas. In certain urban areas of New York and Missouri, costs are more
than 40 percent higher. A comprehensive
interactive map of all 50 states and 90 geographic regions can be
accessed at:
genworth.com/CostofCare.
The following chart lists the 10 regions with the
highest and lowest costs for one year in a private nursing home room.
Most Costly
Regions
Least Costly
Regions
Alaska
$187,902
Texas
(excluding Austin,
Dallas,
Houston, and San
Antonio)
$52,590
New York, NY
$145,392
Georgia
(excluding Atlanta)
$52,139
Bridgeport,
Conn.
$131,958
Oklahoma
$51,607
Newark/Edison,
NJ
$129,570
Minnesota
(excluding
Minneapolis)
$51,342
Conn.
(excluding
Bridgeport)
$119,678
North Dakota
$50,603
Boston, Mass.
$109,396
Arkansas
$49,976
Hawaii
$107,575
Iowa
$49,918
Mass.
(excluding Boston)
$106,321
Kansas
$48,656
NJ (NY metro)
$105,779
Missouri
(except St. Louis
and
Kansas City)
$46,018
San Francisco,
CA
$100,101
Louisiana
$45,539
National
Average
$76,460
Conducted by CareScout
between December 2007 and February 2008, the 2008 Cost of Care Survey
provides national, state and local cost information. It is available
along with the research paper A Workforce to Care for Our Aging, at
genworth.com/CostofCare.
About Genworth Financial
Genworth Financial, Inc. (NYSE:GNW) is a leading
public Fortune 500 global financial security company. Genworth has more
than $114 billion in assets and employs approximately 7,000 people in 25
countries. Its products and services help meet the investment,
protection, retirement and lifestyle needs of over 15 million customers.
Genworth operates through three segments: Retirement and Protection,
International and U.S. Mortgage Insurance. Its products and services are
offered through financial intermediaries, advisors, independent
distributors and sales specialists. Genworth Financial, which traces its
roots back to 1871, became a public company in 2004 and is headquartered
in Richmond, Virginia. For more information, visit
genworth.com.
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