The annual “Cost of Care” report by Genworth Financial was released last week that shows that the cost of care for elderly seniors in the United States continues to rise. According to the survey, the median bill for a private room in a nursing home is now $91,250 per year and the numbers are expected to continue to climb.
Cost of Care Report
Genworth Financial tracks the annual expenses for long-term care through its annual Cost of Care survey. Seniors, their families, government agencies, care facilities, and insurers all look to the annual report in order to know what to expect in elder care. The report looks at over 15,000 nursing homes, assisted living facilities, and other long-term care providers across the country.
Over the last five years, the survey has found that the cost of care for seniors has increased four percent every year. Just last year, the cost of care for an ailing senior was only $87,600, compared to the $91,250 this year.
The National Council on Aging released a statement, saying that “Most people don’t realize how expensive this care can be until a parent or family member needs it . . . and then it’s a real shock.” The survey looks at a variety of long-term care services provided around the United States, including nursing home care, adult day care, and home health aides. The survey found that nursing home rates are increasing the fastest at twice the rate of inflation over the last five years. Now, one year in a nursing home costs three times the average cost of tuition for one year at a private university.
Paying for the Costs of Care
The main question that arises from the annual report is who will pay for the enormous nursing home bill? Many seniors believe that their Medicare coverage will cover the costs in a long-term care facility, but in actuality the program does not. Medicare only covers short-term care costs, like recovery after surgery, but not long-term stays in a nursing home or other community.
Medicaid is an option for seniors, but the program requires that an applicant have less than $2000 in assets before qualifying for the program. This means spending down almost all of your loved one’s money before they can participate and handling complicated estate planning matters. One final option is the purchase of long-term care insurance, where the insurance company covers the costs of long-term care; however, most policies need to be purchased years or decades in advance in order to qualify with a decent premium rate.
Regardless of who is covering the costs of care, the annual Cost of Care report highlights the problems with the increasing cost of long-term care for seniors in the United States. With costs far outpacing the regular inflation rates, simply affording decent long-term care will be a significant issue for millions of seniors in the near future, affecting them and their loved ones seeking long-term care.