HOW MUCH DOES LONG-TERM CARE COST?

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Disclaimer: This website provides general information. It is not intended as a substitute for personal financial, legal or insurance advice.

Long-term care costs depend on a number of variables:

• the kinds of long-term care services you receive
• in what venue you receive long-term care services (community or facility)
• how long you receive long-term care services
• who provides your long-term care services
• where you live

Most people want to stay in their home for long-term care. It's important to realize that home care can cost less than, about the same as, or much more than facility care, particularly if you need round-the-clock care.

New 2007 Figures Released! The Genworth 2007 study of long-term care costs revealed the following:

• The national average hourly rate for home health aides runs $18.57 (non-Medicare certified) to $34.35 (Medicare certified). The cost of home health aides has increased at a compounded 1.6% (for non-Medicare certified) to 2.25% (for Medicare certified) since 2004.¹
• The national average annual cost of a private room in an assisted living facility is now $32,573. "The cost of a one-bedroom unit in an assisted living facility has increased steadily year upon year, as evidenced by a 4.2% compound annual inflation rate from 2004 to 2007."¹
• The national average annual cost of a private room in a nursing home is now $74,806. "Viewed historically over four years, the cost of a private nursing home room has increased steadily year upon year, as evidenced by a 4.7% compound annual inflation rate from 2004 to 2007."¹

Note: In an effort to keep premiums lower for consumers, long-term care insurers have begun offering policies with benefits that compound at 3% annually, or according to the Consumer Price Index. Compare this to the traditional standard of compounding the benefits at 5%. Current figures indicate that these policies may not keep up with the inflationary increases in the cost of facility care. Should you be unable to stay in your home and require facility care, you would need to cover the difference from your own funds, in addition to other gaps in coverage you must co-insure.

By 2031, long-term care costs are projected to reach $250,000 annually.²

1. Genworth Financial 2007 Cost of Care Survey.

2. Lankford, Kimberly, "A Fresh Look at Long-Term Care," Kiplinger's. May 2006.

Copyright © Martha H. Bowes, 2005, 2006, 2007, 2008