Seniors For Living

The folks at Prudential have done it again: the 2010 Long Term Care Cost Study, that is.

Click in to read the full report.

Home care, nursing homes, and assisted living communities are covered in this comprehensive report, which offers statistics, graphs, and detailed information on the costs of long term care. The report also delves into how many consumers are utilizing these types of care, and what the future need will be for these services.

New features in this year’s report include the expansion of cost data from various states/metropolitan areas, a consumer survey to gauge public awareness, interest, and concern about LTC’s rising costs (in proportion with diminishing funds), cost trends, marketplace dynamics, and more.

Here are a few key highlights…

Cost: The average monthly rate for a private room in a skilled nursing facility is $247 (yearly total: $90,155). A semi-private room runs at an average of $215 monthly (yearly total: $78,475).

When it comes to assisted living care, the average monthly base rate is $2930, with an annual average base rate of $35,160. (It’s important to note that this is the base rate – most people who move into an assisted living facility require a number of supplemental services that raise the base rate higher; the number of beds can also drive the price up). Check out page 13 of the report for an interesting breakdown (in graph form) of the incidence of services included in the base rate.

If home care is your service of choice, the average hourly rate for an HHA (home health aide)/CNA (certified nurse aide) is $21; the average hourly rate for an LPN (licensed practical nurse) is $54.

Alaska, Connecticut, New York, Massachusetts and New Jersey are the top 5 most expensive states in which to receive long term care in a skilled nursing facility, with Alaska’s annual average cost topping things off at a whopping $232,100. Oklahoma, South Dakota, Missouri, Louisiana and Arkansas are the 5 least expensive states in which to receive care; Arkansas is at the very bottom, with an average annual cost of nursing home care at $55,800. (Elsewhere in the report, you can find similar data on the cost of assisted living/home health care.)

Concern: “Seven in 10 Americans express concern that they may require long-term care services in the future.”

Despite this large number, only 17% of those interviewed believed that long term care insurance (as a means for paying for care) is essential.  In pages 17-21 of the report, information on the public’s perception of long term care insurance is explored, revealing the need for more education and awareness around the means for paying for long term care, specifically in terms of long term care insurance. Of the various types of insurance (life, auto, home, health, etc.), only 35% of the public indicated a strong knowledge of LTC insurance, and many people had misconceptions about the funding streams available to pay for long term care services.

The report says it best:

“More than a third of adults believe that programs [like Medicare, Medicaid, or private health insurance] will cover their future extended care expenses.”

Other Thoughts:

I found the data on the staff to patient ratio, found on page 16 of the report, to be quite interesting. The stats indicate that smaller facilities typically have a better ratio, which may drive up the cost.

Although the growth in long term care costs have slowed somewhat over the past two years (mostly due to the recession/economic downturn), we are sure to see a rapid increase in demand for services, and consequently, in costs, as baby boomers age.

As per the report:

“Next year, the largest generation in American history—the Baby Boomers (born between 1946 and 1964)—will start turning age 65, greatly increasing the number of older Americans. By the year 2030, the number of Americans in the 65+ category will double to 71 million, comprising 20% of the population.”

Here’s my nutshell of the report: Long term care is and will continue to be expensive, is and will continue to be highly utilized, and on the whole, is not fully understood by the general  public who will need the care someday, either for themselves, for loved ones, or both. No matter what your age, I recommend that you educate yourself and your family members on the types/costs of long term care and explore all available funding streams.

Click here to view the full report from Prudential.

-Michelle Seitzer