by Tom Damron
The annual cost of a private room in a nursing home has cracked the six-figure mark, according to Genworth Financial.
The national annual median cost of a private room in a nursing home is $100,375, the insurer found in its 2018 Cost of Care study.
Overall, the rising cost of care has outpaced inflation. The Consumer Price Index for all urban consumers was 2.1 percent for the first half of 2018. The annual median cost of a room at an assisted living facility grew by 6.67 percent between 2017 and 2018. Meanwhile, the cost of a shared room in a nursing home jumped by 4.11 percent.
"These costs are outpacing the U.S. inflation rate, which is becoming greater competition when it comes to our wallet share," said Gordon Saunders, senior brand marketing manager at Genworth.
Here's a breakdown of the costliest places to seek care.
Alaska is home to the most expensive location for care in a nursing home. There, the annual median cost of a nursing home stay in a private room is $330,873, Genworth found.
The District of Columbia has the highest price tag for a stay in a one-bedroom dwelling at an assisted living facility: The annual median cost is $111,195.
Assisted living facilities offer residents more independence and less medical care and assistance than nursing homes.
Finally, for individuals who'd like to receive care at home and still live largely on their own, there's the option of having a home health aide come to visit.
This service costs the most in Hawaii. Patients can expect to pay a median annual cost of $68,640 for 44 hours a week of home-health service.
With an estimated 10,000 boomers turning 65 every day, experts say the growing demand for support services is raising the cost of care.
"With people living longer, we're seeing a greater demand for that care and assistance as we age," said Saunders. "This is an issue of supply and demand."
"Some factors we start to see that are impacting the home care business is competition for caregivers and minimum wage increases in some states, which affects businesses bottom line," he said.
Indeed, home-health aides are expected to be a growing job sector, with a projected growth rate of 41 percent from 2016 to 2026, but median annual wages of $23,210, according to the Bureau of Labor Statistics.
Planning for care
Though the topline figure for care costs can be daunting, soon-to-be retirees can help prepare by working with an advisor to draft a plan.
Questions you need to tackle from the outset include "Where and how would you like to receive care?" This can help you get an idea of whether you ought to anticipate the high cost of nursing home care or the more moderate cost of receiving home care.
Bear in mind that while you may want to spend the entirety of your retirement receiving affordable care at home, a change in your health could always lead you to an assisted living facility or a nursing home — where costs are higher.
You should also select trusted individuals to oversee your medical care and to make financial decisions for you, in the event you become incapacitated.
Discuss with your advisor whether a long-term care insurance policy or life insurance with a long-term care feature might be right for you.
Long-term care insurance policies have been sliding since about 2012. Back then, there were about 233,000 buyers, accounting for $550 million in premiums, according to data from LIMRA, an insurance industry association. In comparison, last year there were 66,000 buyers of long-term care insurance and $176 million in premiums in 2017, LIMRA found.
And, it’s going to get worse.
P. S. When Jan was in the Alzheimer’s home here in Plano, her monthly rent rose from $4,425.to $5.675. in 4 years. That meant a $312.50 average monthly increase each year.
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