According to the Genworth 2016 Cost of Care Study, the cost of long term care continues to rise sharply year over year, especially for services in the home, where many Americans receive long term care and for a longer period of time than in facilities.
Nationally, the median monthly costs for the services of a homemaker are up 2.56 percent from 2015 to $3,813 and an in-home health aide $3,861 for 44 hours a week, marking the highest year over year increase across all care categories. Over the past five years, home maker costs have risen 11.1 percent and 6.6 percent for health aides.
Year over year, the national median cost of care rose across all care settings, except adult day care, which decreased slightly. The monthly cost of a private nursing home room is $7,698, up 1.24 percent from 2015. The cost of a semi-private room is up 2.27 percent to $6,844 per month. Assisted living communities saw a slight increase in costs of .8 percent to $3,628 per month. Adult day care costs fell 1.25 percent.
Although the high cost of long term care in America is considered the 'new normal,' it does not change the reality of what is certainly one of the biggest societal issues of our time – that at least 70 percent of Americans over age 65 will need some form of long term care services and support during their lives.
"Planning ahead for long term care and how to fund it can be daunting for even the savviest of consumers. Our focus here at Medicaid Plus, P.C is to help protect consumers and families from the financial risk of a long term care need. We use the annual Cost of Care study to help illuminate care options and costs with the hope that our clients will not only plan ahead, but also take action now so they will have a choice about how and where they will receive long term care when they need it."
Home Care Costs Much Higher than Consumers Think
According to a complementary Genworth online caregiving survey, four out of five adults underestimate the costs of home healthcare. Despite this being the most popular care option, nearly one-third of Americans (30 percent) incorrectly believe that costs for these services run under $417 per month, when in actuality, the national median rate is $3,861 per month for an in-home aide or $3,813 per month for homemaker care. All told, the average American underestimates the cost of in-home care by almost 50 percent.
Interestingly, people who stand to be affected most by long term care events are also more likely to underestimate the cost of care, according to the complementary study. This includes women (who are statistically more likely to enter caregiving roles), single adults (who may not have a partner to rely on for caregiving needs), and younger adults (aged 25-45, who are more likely to deal with the reality of a parent needing care).
The data from the complementary study dramatically demonstrated the huge disparity between what consumers think costs are and what they actually are, which is why it's so important for families to educate themselves about the costs and plan ahead for how they will pay for those costs before it's too late.
Planning ahead may be the only way to avoid losing your families hard earned savings, the most popular ways to pay for long term care are as follows:
- Long Term Care Insurance - This is very costly, premiums continue to skyrocket and its very difficult to get approved for a policy and it will only cover a portion of the care costs for certain length of time.
- Medicare - contrary to popular belief, Medicare will not cover most long term care costs, it will only cover costs in a facility after a "qualifying" stay in a hospital and the only for 20 days, after the first 20 days it will only pay a small portion of the costs for an additional 80 days, that's it.
- Private financing - paying form your own savings is what many people do until they exhaust their assets and there are also life insurance policies that can be used to fund long term care costs.
- Medicaid - more than 70% of all Americans receiving long term care rely on Medicaid to pay their costs. Qualifying is based on both financial and medical evaluations.
Other ways are available depending upon a persons financial situation. The sooner that you begin planning the more options you will have available to you.
Concerns or questions about the high cost of nursing and long term care costs? Contact us today for a FREE consultation.