Marketing Corner – Highlights from The New Genworth Cost of Care Study
Marketing Corner – Thursday, October 12th, 2017
New Genworth Study – Need to Knows
One of the most important things for retirees and pre-retirees to consider is the impact long-term care can have on their retirement. The trade-off of our longer life expectancies is the increasing likelihood of a long-term care condition or other medical situation. Obviously, a persistent medical condition can reduce the quality of life, but with high costs, a long-term care condition can result in significant financial damage.
To illustrate this, each year Genworth conducts a comprehensive survey of long-term care costs from sources all over the country. Here are some key highlights from the 2017 Genworth Cost of Care Study.
Cost Increases Since Last Year
Across numerous long-term care categories, such as home health aide services, homemaker services, adult day health care, nursing home care and more, the 2017 Genworth study found significant increases over 2016 figures. For example, the national median hourly rate for home health aide services is $22 per hour, an increase of 6.17% over what the survey found last year. The National median for semi-private nursing home care is $235 per day, a percentage increase of 5.50% since 2016.
Cost Increases Over A Five Year Period
The study also looked at increases over the last five years for the categories mentioned in the previous paragraph. While not as sharp of an increase, they do trend upward. Homemaker services experienced a five-year annual growth rate of 3.08%, while nursing home care (private room) experienced an increase of 3.76%.
Projected Cost Increases Over The Next Ten Years Are Alarming
The national medians for long-term care costs are projected to increase significantly over the next 10 years. For instance, the annual median cost of care in an assisted living facility is projected to climb to $60,476 from $45,000. The 2027 national median for private room nursing home care is expected to rise to $130,971 from $97,455 in 2017.
Highs and Lows By State
The US state with the highest median for home health aide? Got to be New York or California right? Actually, it is North Dakota, at $63,972 per year, with Alaska, at a close second of $63,492. This actually makes sense, given the low population and lower service providers of these states. With people leaving large cities for the suburbs and rural areas, this may become a problem down the line. Curiously, Kentucky has the lowest median for home health aide at $34,892 and a 0% 5-year growth rate for this category.
This is only a snapshot of one category the study looked at. You can see the state by state breakdown here.
To take an interactive look, and to drill down to select cities, use this tool available on Genworth’s website.
What does this all mean? While the numbers are specific to one study (a comprehensive one, for sure) they do show clients the high cost of long-term care. Without sufficient protection, retirement can be derailed, exhausting resources and burdening families.
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