The cost of long-term care went up again in 2017, this time at three times the rate of inflation, according to the Genworth’s “2017 Cost of Care Survey,” released recently.
The annual median cost of long-term-care services increased an average of 4.5 percent from 2016 to 2017, which is the second-highest year-over-year increase for nursing homes and home care since the study began in 2004; the increase is nearly three times the 1.7 percent U.S. rate of inflation, Genworth said.
The increase was most pronounced for home health aides, whose cost increased 6.17 percent to $21.50 an hour. The cost of assisted-living facilities increased by 3.36 percent to $235 a day, and the cost of a private room in a nursing home went up 5.5 percent to $267 a day.
Approximately 70 percent of those people now over 65 will need long-term care at some time in their lives, Genworth said.
“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,” said David O’Leary, president and CEO of Genworth’s U.S. Life Division.
After remaining flat for some time, the cost of care at home has been escalating over the past three years because of an increase in labor costs. Nursing home costs are increasing because of 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.
Two-thirds of consumers mistakenly believe government programs will cover all or part of long-term-care costs. Medicare, for the most part, does not cover long-term care and Medicaid has strict income and asset limits.
To help advisors and consumers determine long-term-care costs, Genworth has a “Cost of Care” app available through iTunes. Financing options can be found at www.genworth.com/longtermcare.