Long Term Care Costs Jump As Much As 25 Percent Since 2004RICHMOND, Va., Apr 29, 2008 (BUSINESS WIRE) -- Not only has the cost of long term care in U.S. nursing homes,
assisted living facilities and in the home increased for the fifth
consecutive year, but the nation faces an impending shortage of
direct-care workers, further driving up long term care costs. Those
are two of the key conclusions drawn from cost of care research by
Genworth Financial (NYSE:GNW).
Each year Genworth surveys the cost of care in more than 10,000
nursing homes, assisted living facilities and home care providers in
all 50 states and 90 geographic regions including the District of
Columbia. This year the survey adds adult day health care findings.
The most comprehensive cost analysis in the industry, it surveys three
times the number of providers and offers more regional detail than
similar studies, and is the only survey that provides comparative data
for the past five years.
This year, Genworth's study found the price of most long term care
services are rising faster than inflation, and by 2050, the nation's
bill for providing long term care services is expected to top $379
billion. In 2008, the average annual price of a private nursing home
room reached $76,460 nationally - more than one and a half times the
average annual household income in the U.S. of $48,201(1). The most
preferred form of care is in the home, and the cost of home care
performed by a non-skilled home health aide remained flat in most
regions of the country.
This year's Cost of Care Survey is complemented by additional
research released today by Genworth entitled "A Workforce to Care for
Our Aging." This study identifies an imminent shortage of caregivers
as the driver of increasing long term care costs. By 2030, the number
of Americans 65 years and older will double. The U.S. will need to
recruit 200,000 new direct-care workers each year to meet future
demand among our aging population.
Another challenge is the caregiver workforce is dwindling as it is
struggling to retain its existing workforce. The turnover rate for
paraprofessional long term care workers in the U.S. is
disproportionately high - 13 to 18 percent higher than the overall
labor workforce and 20 percent higher than other service workers.
"Unless something is done to directly address this growing care
gap, not only will paying for long term care be difficult for many,
but finding it may be as well," said Buck Stinson, president of
Genworth Financial's Long Term Care Insurance business.
"With 78 million baby boomers set to retire in the next few
decades, America faces an impending workforce crisis in the long term
care industry that could strain the economy and negatively impact
millions of Americans and their families," he said. "These are serious
problems that require collaborative, results-oriented discussions
among policymakers and stakeholders."
Key Cost of Care Findings
Following are key findings, broken out by major category:
-- Nursing Homes: The national average annual cost of a private
room in a nursing home is $76,460 or $209 per day, a 17
percent increase over 2004 rates. This remains the most costly
option. The most expensive average per day room rate was found
in Alaska ($515) and the least expensive average per day room
rate was found in Louisiana ($125).
-- Assisted Living Facilities (ALF): A private one-bedroom unit
in an assisted living facility has an average annual cost of
$36,090 in the U.S., a jump of 25 percent since 2004. The most
expensive average unit was found in New Jersey ($4,921 per
month) and the least expensive average unit was found in
Arkansas ($1,981 per month).
-- Home Care: Nationally, the average hourly rate for a
non-Medicare certified, state licensed home health aide is
$19.18, a cost that translates to $43,884 per year for 44
hours per week of care. That's only a 4 percent increase over
the hourly rate for a non-Medicare certified home health aide
in 2004 of $18.43.
-- Adult Day Health Care: First year research findings indicate
the average annual cost across the country for five days a
week in an adult day health care facility is $15,236.
"The expense of just a few years of long term care in a facility
or at home can very quickly wipe out a lifetime of savings," noted
Stinson. "As most Americans prefer care in their homes, which puts a
greater need on expanding home-based options, we must encourage
families to start talking about long term care today and to
incorporate it into their overall retirement strategy."
Regional Variations Abound
The cost of long term care varies widely by region, with costs in
urban areas averaging 16 percent more than non-urban areas. In certain
urban areas of New York and Missouri, costs are more than 40 percent
higher. A comprehensive interactive map of all 50 states and 90
geographic regions can be accessed at: genworth.com/CostofCare.
The following chart lists the 10 regions with the highest and
lowest costs for one year in a private nursing home room.
Most Costly Regions Least Costly Regions
----------------------------------------------------------------------
Alaska $187,902 Texas (excluding Austin, $52,590
Dallas, Houston, and San
Antonio)
----------------------------------------------------------------------
New York, NY $145,392 Georgia (excluding Atlanta) $52,139
----------------------------------------------------------------------
Bridgeport, Conn. $131,958 Oklahoma $51,607
----------------------------------------------------------------------
Newark/Edison, NJ $129,570 Minnesota (excluding $51,342
Minneapolis)
----------------------------------------------------------------------
Conn. (excluding $119,678 North Dakota $50,603
Bridgeport)
----------------------------------------------------------------------
Boston, Mass. $109,396 Arkansas $49,976
----------------------------------------------------------------------
Hawaii $107,575 Iowa $49,918
----------------------------------------------------------------------
Mass. (excluding Boston) $106,321 Kansas $48,656
----------------------------------------------------------------------
NJ (NY metro) $105,779 Missouri (except St. Louis $46,018
and Kansas City)
----------------------------------------------------------------------
San Francisco, CA $100,101 Louisiana $45,539
----------------------------------------------------------------------
National Average $76,460
----------------------------------------------------------------------
Conducted by CareScout between December 2007 and February 2008,
the 2008 Cost of Care Survey provides national, state and local cost
information. It is available along with the research paper "A
Workforce to Care for Our Aging," at genworth.com/CostofCare.
About Genworth Financial
Genworth Financial, Inc. (NYSE:GNW) is a leading public Fortune
500 global financial security company. Genworth has more than $114
billion in assets and employs approximately 7,000 people in 25
countries. Its products and services help meet the investment,
protection, retirement and lifestyle needs of over 15 million
customers. Genworth operates through three segments: Retirement and
Protection, International and U.S. Mortgage Insurance. Its products
and services are offered through financial intermediaries, advisors,
independent distributors and sales specialists. Genworth Financial,
which traces its roots back to 1871, became a public company in 2004
and is headquartered in Richmond, Virginia. For more information,
visit genworth.com.
Note to Television Broadcasters: B-roll to support this story can
be down linked at the following coordinates/times:
- Tuesday, April 29th
- 2:00-2:15 PM ET
- GA 26C/1 DL 3720V
- Wednesday, April 30th
- 04:00-04:15 AM ET
- AMC 3, Tr. 8, DL 3860V
(1) U.S. Census Bureau, 2006
SOURCE: Genworth Financial, Inc.
Media:
Genworth Financial, Inc.
Yokima Cureton, 804-662-2598
Yokima.cureton@genworth.com
