The increase in the cost of in-home personal and medical care for the burgeoning population of seniors is far outpacing the increases in other types of care, according to the recently released Genworth Cost of Care survey.
This unexpected finding of the study, which has been conducted for the past 16 years, is something financial advisors need to consider when helping their clients plan retirement, said Gordon Saunders, senior brand marketing manager at Genworth who manages the Cost of Care Survey.
The cost of homemaker services, such as cooking, cleaning and running errands, went up 7.14% in the last year, Genworth said. The increase in the cost of home health services came in second with an increase of 4.55% in the past year.
In comparison, the cost of assisted living facilities went up 1.28% and the increase for nursing home care, which has been gone up drastically in past years, went up 0.96% for a semi-private room and 1.82% for a private room, the study said.
“There are several reasons for this,” Saunders said. A lot of senior living facilities have been built in recent years so there may be enough capacity, which will make that cost stabilize, but the demand for in-home care has increased.
“It takes a special person to provide in-home care and unemployment is low, so people have a choice of careers,” he said.
In addition, people are living longer and staying in their homes longer, so the demand for home health and personal care is growing and health care agencies have to offer employees more pay and benefits to attract them. Consumers will be the ones to pay for that, he said.
“We have been told that skilled home care providers get as many as three job offers a week,” Saunders said.
The national annual median cost of homemaker services is $51,480, about half the annual median cost of nursing home care.
“Considering that most people want to stay in their homes as they grow older and 65-year- olds today have a 70% chance of needing some type of long term care services in their remaining years, it’s evident that planning for how to pay for long term care is now more urgent than ever,” Saunders said.