Long-Term Costs Continue to Rise

Courtesy MetLife

MetLife Mature Market Institute‰Ûªs 2012 market survey shows that average national long-term care costs continue to rise. The national average annual charge for a private nursing home room rose to $90,520 this year, while semi-private rooms climbed to $81,030 and assisted living residency jumped to $42,600.

  • Nursing home rates increased by 3.8% to $248 daily for a private room and 3.7% to $222 daily for a semi-private room.

    In 2011, 66% of nursing home residents were women;median age of residents was 82.6 years; 16% of all residents were under the age of 65.

  • Assisted living base rates rose by 2.1% to $3,550 monthly.

  • Rates for adult day services remained unchanged at $70 per day.

    There are over 5,000 adult day centers in the U.S. serving over 260,000 participants and family caregivers. Sixty-three percent of surveyed centers provide transportation. Half do not charge a fee for this service.

  • Home health aide rates were unchanged at $21 per hour.

    The majority (68%) of home health care agencies surveyed provide Alzheimer‰Ûªs training to their employees and almost all do not charge an additional fee for patients with Alzheimer‰Ûªs.

  • Homemaker/companion service rates increased by 5.3% to $20 per hour.

MetLife surveyed 2,078 nursing homes, 1,513 assisted living communities, 1,732 home care agencies, and 1,363 adult day services centers in all 50 states and the District of Columbia. The cities/areas surveyed were chosen on the basis of population and the ability to obtain a representative sampling of facilities and providers.
Paying for long-term care only gets harder and harder. With the CLASS Act demolished and few players left in the long-term care insurance market, consumer options are dwindling.

The Assurance Benefit might be an interim savior for some people, allowing them to hold on to assets and not spend down as quickly.

There are larger issues at play here though. On the consumer side, people need to financially plan for their long-term care needs and that is hard to do when you are young and healthy and are not thinking about this. There is also a responsibility for people to take care of themselves physically. People with multiple chronic conditions account for 80 percent of the healthcare costs in this country. I see people in nursing homes who got there not because age caught up with them but because they did not keep up with themselves.
For providers, the future is clear. Just as hospitals are being asked to become more efficient while increasing quality so too are long-term providers. These costs cannot continue to rise with an expectation that consumers will be able to pay or that the government will either, whether it is through the Medicare or Medicaid system. And people will migrate to the lowest cost setting so aging in place will become more and more prevalent. That in turn means changing your business model to compete. There is a prediction that in the next two decades we will not need half of the hospitals in this country. Would venture to guess the same for four-walled providers of long-term care services.

(Reprinted from my about.com blog on the same topic.)