Long Term Care Costs Cheapest at Home

Genworth annual survey finds institutional costs continue to rise as home-based care costs flatten out.

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Institutional costs for long term care continued to post big increases last year even as the economy sputtered along, according to the seventh annual Cost of Care survey from Genworth Financial, a major seller of long term care insurance. The good news in the survey is that costs for in-home care -- where nearly 80 percent of people prefer being cared for -- have risen very little during the past five years.

At some point, two-thirds of us over the age of 65 will need someone or someplace to take care of us. Illness or physical disabilities will make it impossible to perform what are called the activities of daily living (ADL) by ourselves. These include dressing, eating, bathing, and using the bathroom.

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  Genworth expanded its 2010 survey to include all 436 metro areas covered in the 2010 Census. The pricing details it provides at the local level help people make informed decisions, notes Beth Ludden, Genworth senior vice president for long term care product development.

Expanding on the survey's findings about home care, Ludden says, "I think the most important thing around in-home care is that you have a network of people in the community who are able to support you." Many people feel, she adds, that people who start with in-home care will eventually be forced to go into an assisted living facility or a nursing home. But that's not borne out by Genworth's claims experience. Nearly 70 percent of the people who begin receiving in-home care under the company's policies stay at home throughout the time they need care. "This explodes the myth that I might start at home but will eventually have to go to a community."

Another major misconception about long term care is that it is covered under Medicare. Medicare covers some short-term care situations but these are restricted largely to specific illnesses and injuries for which a cure is expected. Long term care, by contrast, deals with quality of life maintenance issues. Private insurance is triggered when someone can't perform two of the six major ADLs or suffers some form of cognitive impairment, most commonly Alzheimer's Disease. Medicare does not cover those conditions.

"We still continue to see misunderstanding in the public about the things that Medicare and Medicaid pays for," Ludden says. To help expand and improve public understanding of long term care, Genworth last year launched a "Let's Talk" program online to encourage family members to discuss long term care issues and needs.

The Genworth survey includes a useful interactive tool that displays costs by state and local area, and permits comparisons of up to four locations at a time. Also, you can see projections of what future prices will be like assuming current prices increased at the rate of 5 percent annually.

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Here are the specific national costs and rates of price increase for the types of long term care tracked in the Genworth survey:

Licensed Homemaker Services -- $18 national median hourly rate; up 3.0 percent from 2009; 2.4 percent five-year annual growth rate.

Licensed Home Health Aide Services -- $19 national median hourly rate; up 2.7 percent from 2009; 1.7 percent five-year annual growth rate.

Adult Day Health Care -- $60 national median day rate; up 12.0 percent from 2009; five-year growth rate unavailable.

Assisted Living Facility, One Bedroom, Single Occupancy -- $3,185 national median monthly rate; 12.0 percent from 2009; 6.7 percent five-year annual growth rate.

Nursing Home, Semi-Private Room -- $185 national median daily rate; up 5.7 percent from 2009; 4.6 percent five-year annual growth rate.

Nursing Home, Private Room -- $206 national median daily rate; up 5.1 percent from 2009; 4.5 percent five-year annual growth rate.

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