Cost of Long-Term Care Rises in Institutions, Stays Flat at Home

Annual survey finds continued hikes in nursing home rates but little increase in at-home care.

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Although long-term care costs in nursing homes and assisted living facilities continued to rise last year, in-home care costs did not increase at all, and have risen very little in the past six years, according to the 2011 Cost of Care Survey sponsored by Genworth Financial, a provider of long-term care insurance.

"Home care rates have remained flat in part because of increased competition among agencies and the availability of unskilled labor, and by avoiding costs associated with maintaining stand-alone health care facilities," the survey said. Most consumers prefer to receive care in their homes, and Genworth noted that more than two-thirds of its initial long-term care insurance claims are for in-home benefits.

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Institutional care costs, however, have continued to climb. "In 2005 the median annual rate for a private nursing home room was $60,225 compared with the 2011 median annual rate of $77,745," Genworth said. "This means that Americans can expect to pay approximately $17,520 more per year today for a nursing home than they had to pay in 2005. This increase represents a 4.35 percent compound annual growth rate over that period."

The survey provides details costs from nearly 15,500 care providers throughout the country. Genworth has provided an interactive tool to look at costs in 437 specific markets, and allows users to simultaneously compare up to three different markets.

While its overall cost trends are based on U.S. median prices, there are enormous state and area pricing differences. Genworth stressed that consumers may be able to find pricing discounts, service enhancements, and other provider benefits by carefully shopping around. Depending on the hours of care needed, and the time of the month when care is sought, some facilities might offer reduced prices, the company said in a consumer tip sheet accompanying the survey.

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According to a 2008 U.S. Department of Health and Human Services study cited in the survey, two out of every three people age 65 and older will need some form of long-term care during their remaining lives. While many consumers mistakenly think Medicare will cover long-term care expenses, it covers only in-hospital care and then only for a maximum of 100 days. Medicaid pays for most long-term care in the United States, but most people must first exhaust virtually all of their wealth before they can qualify for the program.

There are six different types of long-term care measured by the survey. Here are the details on each type of care, including cost trends.

Home-Based Services

Homemaker services (licensed). Provides "hands-off" care, such as helping with cooking and running errands. Often referred to as "personal care assistants" or "companions." This is the rate charged by a non-Medicare certified, licensed agency.

Minimum hourly rate: $9

Maximum hourly rate: $34

National median hourly rate: $18

Increase over 2010: zero percent

Six-year annual growth: 1.98 percent

U.S. average median annual expense: $41,184

State with highest median annual expense: Alaska; $59,374

State with lowest median annual expense: Alabama; $34,320

Home-health aide services (licensed). Provides "hands-on" personal care, but not medical care, in the home, with activities such as bathing, dressing, and transferring. This is the rate charged by a non-Medicare certified, licensed agency.

Minimum hourly rate: $10

Maximum hourly rate: $34

National median hourly rate: $19

Increase over 2010: zero percent

Six-year annual growth: 1.38 percent

U.S. average median annual expense: $43,472

State with highest median annual expense: Alaska; $60,632

State with lowest median annual expense: West Virginia; $35,464

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Adult day health care. Provides social and other related support services in a community-based, protective setting during any part of a day, but less than 24-hour care.

Minimum daily rate: $15

Maximum daily rate: 160

National median daily rate: $60

Increase over 2010: zero percent

Six-year annual growth: N/A

U.S. average median annual expense: $15,600

State with highest median annual expense: Vermont; $31,200

State with lowest median annual expense: Texas; $7,800

Services at a Facility

Assisted living facility (one bedroom/single occupancy). Provides "hands-on" personal care as well as medical care for those who are not able to live by themselves, but do not require constant care provided by a nursing home.

Minimum monthly rate: $674

Maximum monthly rate: $9,500

National median monthly rate: $3,261

Increase over 2010: 2.39 percent

Six-year annual growth: 5.99 percent

U.S. average median annual rate: $39,135

State with highest median annual rate: Alaska; $66,000

State with lowest median annual rate: Georgia; $28,800

Nursing home (semi-private room). Provides skilled nursing care 24 hours a day.

Minimum daily rate: $85

Maximum daily rate: $826

National median daily rate: $193

Increase over 2010: 5.7 percent

Six-year annual growth: 4.52 percent

U.S. average median annual rate: $70,445

State with highest median annual rate: Alaska; $222,285

State with lowest median annual rate: Texas; $46,355

Nursing home (private room). Provides skilled nursing care 24 hours a day.

Minimum daily rate: $89

Maximum daily rate: $826

National median daily rate: $213

Increase over 2010: 5.1 percent

Six-year annual growth: 4.35 percent.

U.S. average median annual rate: $77,745

State with highest median annual rate: Alaska; $227,760

State with lowest median annual rate: Missouri and Oklahoma (tie); $52,925

Twitter: @PhilMoeller