Posted on 19 Aug 2008
According to the U.S. Census Bureau, by 2030 the number of Americans aged 65 and older will more than double to 71 million, comprising approximately 20 percent of the U.S. population. With an aging population boom, Prudential Financial, Inc. has issued a report entitled "Long-Term Care Cost of Care," a resource for consumers seeking information to help them make informed decisions about their long-term care needs.
The study found an increase in the average cost of long-term care ranging from 5% to 13%, varying by type of service, in the past two years alone.
“Many Americans mistakenly believe that Medicare or private health insurance will pay for their long-term care needs. The reality is long-term care risk is substantial, and under current Medicare and Medicaid policy, much of it is the uninsured private responsibility of individuals who pay for care and of families who care for their relatives,” said Andy Mako, Senior Vice President, Long-Term Care Insurance, Prudential.
Prudential’s Cost of Care study sheds light on the state-specific average costs associated with nursing homes, assisted living facilities, and home health care services.
The study results show the average assisted living costs and average nursing home costs in Alaska as the most expensive in the country at $82,956 per year and $183,595 per year respectively. Detroit ranked the highest for home health care hourly rate at $38.
The fact is, without proper planning, the annual cost of long-term care can quickly deplete even a sizable nest egg. “While no one wants to think about 'that time' when they may need care in an assisted living facility, a nursing home, or at home care, it’s essential that consumers consider the costs now and implement a financial plan to help ensure they receive the quality of care they desire,” added Mako.
Key findings in the study include:
* Average costs for long-term care services increased over the past two years and are expected to continue to rise.
* The average daily cost for an assisted-living facility is now more than $100, or $3,241 per month. What’s more, the average daily cost of a private room in a nursing home is now $217, or $79,205 annually.
* Home health care experienced the smallest rate increase, rising just 5 percent over the past two years. The average hourly rate for a home health aide/certified nursing assistant increased by $1 in the past two years, to $21.
*Costs for long-term care services continue to vary significantly by location, with Alaska, New York City, and Stamford, CT consistently being the most expensive areas for nursing home and assisted living facilities, and Oklahoma City, St. Louis, and South Dakota being the least expensive.
Prudential is launching an updated interactive consumer cost of care mapping tool on the web, designed to provide more in-depth state-specific cost detail – and in some cases city-specific – aimed at arming consumers with essential facts to help them make better financial decisions.
“While consumers understand the importance of planning for their financial future, they continue to have misperceptions about the costs of long-term care services and the benefits of long-term care insurance. Our resources can help them dispel these myths and put them on the right path to securing their retirement,” added Mako.