Sure, you might be a spry 30-something living your best life, leaving the future for the future. But a new report suggests you might want to start planning for you later years, as the costs of long-term care are surging and don’t appear to be stabilizing anytime soon.
While long-term care can be provided in a variety of settings — from in-home health aides to private nursing home facilities — each option comes at an expense, and it keeps growing.
The increases represent the second-highest year-over-year increase for nursing homes and home care since the company began tracking costs in 2004.
Nursing Home Care
Genworth’s report looked at a variety of care options, but notes that consumers in need of around-the-clock care will likely seek out a nursing home facility. But these facilities also come with the highest cost.
According to the report, private rooms in a nursing home have increased 5.5%, while the cost of a semi-private room has increased 4.44%.
The national average for a patient to live in a private room at a nursing home is $8,121/month, or roughly $97,452/year. Move to a semi-private room and the cost drops slightly to $7,148/month, or $85,776/year.
While you might think those costs are pretty steep, it will only climb over time.
In 2027, the cost for a private room increases to $10,914 per month, or $130,968/year, while the semi-private room will run $9,606/month, or $115,272/year.
Families looking to keep their loved ones at home, but with a little bit of help, will also find their expenses increasing.
For instance, home health aide services — which involve “hands-on” personal care — have increased 6.17% to $4,099/month.
On the other hand, homemaker services — which is described as hands-off care, such as cooking, cleaning, and running errands — have increased 4.75% to $3,994/month.
In the future, the costs continue to climb. A home health aide will cost $5,509/month in 2027, while homemaker services will increase to $5,368/month in 10 years.
Genworth notes that the increases in long-term care can be attributed to a perfect storm of labor shortages, increases to minimum wages, tighter Medicare rules, and sicker patients.
For example, nursing home costs have increased due to a combination of higher labor costs and tightened Medicare rules, which have resulted in shortened hospital stays and sicker patients being sent to rehab nursing homes for shorter stays, where costs have risen to cover those chronic medical conditions, Noreen Guanci, CEO and co-founder of Long Term Solutions, said in a statement.
Additionally, room and board has also increased over the past two to three years in order to accommodate residents who are sicker.
Why Do We Care?
While many consumers aren’t thinking of their future long-term care needs, that doesn’t mean they shouldn’t.
This is especially true, Genworth found, when it comes to consumers’ expectations of their own out-of-pocket costs.
A consumer sentiment survey conducted in conjunction with the Cost of Care Survey found that nearly two-thirds of respondents expect government programs to cover allow part of their long-term care costs.
However, that likely won’t be the case, Genworth reports. Medicare, for example, will pay for limited nursing home care following a three-day hospital stay, but only if the patient has been formally admitted to a Medicare-certified nursing facility as an in-patient and not for observation.
Medicare also doesn’t pay for home care, if skilled nursing care is not needed.
“The purpose of the study is to raise awareness about the cost of aging and help start the conversation about planning for long-term care,” David O’Leary, president and CEO of Genworth’s US Life Division, said in a statement.