Additional Polling Shows 75% of Americans Have No Long Term Care Plans
RICHMOND, Va., April 3, 2007 -- Genworth Financial's (NYSE:GNW) 2007 Cost of Care Survey found the average national cost of care for nursing homes, assisted living facilities and in the home has steadily increased over the past four years and has reached new highs that exceed most household incomes in the U.S.1 The rising costs of long term care may, therefore, present difficulties for many Americans should they need to pay for long term care out of their own pockets.
A separate national poll conducted by Public Opinion Strategies for Genworth Financial with input from the Alzheimer's Association found that 75 percent of Americans have made no long term care plans and 59 percent expressed concern about being able to pay for long term care. Almost half of the respondents (44 percent) incorrectly believe that Medicare or their private health insurance will pay for their long term care needs. In actuality, health insurance and the federal Medicare program do not generally cover long term care.
Genworth's annual benchmark study surveyed more than 11,000 nursing homes, assisted living facilities and home care providers in all 50 states and the District of Columbia. It was conducted by CareScout between January and February 2007 to gain a comprehensive view of long term care expenses. The 2007 Cost of Care Survey, which offers national, state, and local cost information is available at www.genworth.com.
According to the 2007 Cost of Care Survey, the average national cost in 2007 of a single year in a private nursing home room is $74,806. To put this into context, one year in a private nursing home room costs nearly one and a half times the average full 4-year college degree in the U.S., including tuition, room and board (College Board's national average for public colleges is $51,184 for four years, making a single year in a nursing home 46 percent more expensive).
“The rising costs of providing quality long term care for our seniors continues to be a source of worry for many Americans,” said Buck Stinson, president of Genworth Financial's long term care insurance business. “With so many Baby Boomers heading into retirement, it's critical that long term care planning be integrated into every adult's retirement strategy. Paying for just a couple of years of long term care out of pocket can very easily deplete an entire life's savings and retirement. Not planning ahead can also limit the variety of choices available, such as the ability to live independently at home with assistance from a home health aide.”
The cost of assisted living facilities has also increased sharply in the last four years, by more than 13 percent, to a new annual average cost of $32,573 for a one-bedroom unit.
If given the choice between care in a facility such as a nursing home or an assisted living facility and care at home, 75% of national poll respondents said they would prefer care at home. However, the hourly rate for a home health aide has increased 2.7 percent since Genworth's 2004 Cost of Care Survey. The average cost for a 40-hour per week home health aide – $52,977 a year – is more than the median household income in the U.S. of $46,272.
The 2007 Cost of Care Survey also found that long term care costs varied depending on region. On average, the cost of nursing home care in the Northeast is $40,000 a year more expensive than in the Midwest. In fact, the average annual cost of a private nursing home in the Northeast region topped $100,000 for the first time. Assisted living facilities also vary widely by region, costing an average of $12,000 more a year in the Northeast than in the Southeast.
In the Alzheimer's Disease Facts and Figures 2007 study, the Alzheimer's Association recently reported that the prevalence of Alzheimer's disease has increased 10 percent in the last five years and that someone in America develops Alzheimer's every 72 seconds. Seventy-two percent of poll respondents said that the possibility of developing Alzheimer's disease makes planning for their long term care more important to them.
Following are key findings from the Genworth 2007 Cost of Care Survey,
broken out by major category.
- Nursing Homes: The average annual national cost of a private room in a nursing home is $74,806 or $204 per day, reflecting a 14.8 percent increase over 2004 rates. This remains the most costly care option. The most expensive per day room rate was found in Alaska ($539) and the least expensive was found in Louisiana ($119).
- Assisted Living: A private one-bedroom unit in an assisted living facility has an average annual cost of $32,573, a 13 percent increase since 2004. The most expensive one-bedroom unit was found in Massachusetts ($4,753 per month) and the least expensive was found in North Dakota ($1,609 per month).
- Home Care: The average hourly rate for Medicare/Medicaid certified and state licensed home health aides is $25.47 an hour, a cost that translates to a $52,977 per year for 40 hours per week.
About Genworth Financial
Genworth is a leading financial security company meeting the retirement, longevity and lifestyle protection, investment and mortgage insurance needs of more than 15 million customers, with a presence in more than 25 countries. For more information, visit Genworth.com.
1 U.S. Census Bureau, 2005 American Community Survey
SOURCE Genworth Financial, Inc.
CONTACT: Tom Topinka of Genworth Financial,
for Genworth Financial