Costs for long-term care increase again
Long-term care costs are surging again and the most expensive option — a private nursing home room — may soon top $100,000 per year.
Growing labor expenses and sicker patients helped push the median cost of care that includes adult day care and assisted living communities up an average of 4.5 percent this year, according to a survey released last week by Genworth Financial. That’s the second-highest increase since Genworth started its survey in 2004.
The cost of home health aide services climbed the most, rising 6 percent, to $21.50 an hour. Private nursing home care now costs more than $97,000 annually.
Many Americans don’t plan for such expenses or understand them until they face them, said Joe Caldwell of the National Council on Aging, which is not tied to Genworth’s study.
“People don’t like to think about it and talk about it ahead of time, so they kind of put off planning and saving for it financially, because they don’t think it’s going to happen to them,” he said.
The survey found the median cost of a private nursing home room in Tennessee is about $79,000 per year. Georgia and Alabama clock in at $80,000 and $78,000, respectively, with Georgia’s rate growing the most — 5 percent over five years.
Nashville-area private rooms are nearly $95,000 annually, the priciest in the state, and Chattanooga is a close second with a median cost of more than $94,000. A private nursing home room in Knoxville is about $85,000, according to the survey.
Greg Vital, president of Morning Pointe Senior Living, a Chattanoogabased senior health care services company with 35 locations across the Southeast, said many factors affect costs, but finding trained health care professionals to accommodate the growing aging population is a major challenge.
In particular, there’s a shortage of licensed practical nurses in the region, according to Vital.
“We all are competing for those young professionals,” he said. “That puts additional pressure on the industry when it takes from six months to two years, depending on the lag in completion of education and certification, to join the workforce.”
Long-term care costs can impose crushing financial burdens on individuals or families, in part because private health insurance and Medicare, the federal program for people over age 65, offer only limited help. That can force those without private coverage to spend down their assets until they qualify for Medicaid, the government’s health insurance program for the poor.
Genworth Financial Inc. sells long-term care coverage and didn’t address that cost in its national study, which was based on information from 15,000 longterm care providers.
Coverage costs are rising as well, Caldwell said, noting that few employers
offer help with that expense as they do with retirement planning or more common forms of coverage such as health insurance.
Initial premiums for longterm care coverage can cost well over $2,000 annually, depending on the customer’s age, according to the Bipartisan Policy Center, which researches health care issues.
A third of Americans 40 and older have done no planning for their longterm care needs, according to a 2016 Associated PressNORC Center for Public Affairs Research survey.
Caldwell said many people don’t realize the limits of Medicare coverage, and he expects the need for long-term care to soar.
For 2017, long-term care prices climbed in part because the cost of labor rose, according to Genworth. Care providers had to raise pay to compete for workers in a tight job market or comply with state requirements for minimum wages. Many also have started providing health insurance to their workers to comply with the Affordable Care Act. The federal law requires all companies with 50 or more full-time employees to offer coverage.
Genworth researchers say costs also are rising because care providers are working with patients that have more complex medical needs and live longer than they did a decade ago. Plus Medicaid offers reimbursement that can fall below the cost of care, which forces long-term care providers to make that up in their prices.
Genworth sees no sign that long-term care expenses are starting to slow, said David O’Leary, CEO of the company’s U.S. life division.
“We only see cost of care increasing,” he said.
Staff writer Elizabeth Fite contributed to this story.