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Future Costs of Long Term Care

Published on August 20th, 2008

Prudential Study Sheds Light on the Increasing Costs of Long-Term Care.  Prudential website has a great tool to determine the cost of long term care in each state. 

According to the U.S. Census Bureau, by 2030 the number of Americans aged 65 and older will more than double to 71 million, comprising approximately 20 percent of the U.S. population. With an aging population boom, Prudential issued 2008 Long-Term  Care Cost of Care research report.  The study found an increase in the average cost of long-term care ranging from 5% to 13%, varying by type of service, in the past two years alone.

"Many Americans mistakenly believe that Medicare or private health insurance will pay for their long-term care needs. The reality is long-term care risk is substantial, and under current Medicare and Medicaid policy, much of it is the uninsured private responsibility of individuals who pay for care and of families who care for their relatives," said Andy Mako, Senior Vice President, Long-Term Care Insurance, Prudential.

Prudential’s Cost of Care study sheds light on the State-specific average costs associated with nursing homes, assisted living facilities, and home health care services.

The study related significant issues:

— Average costs for long-term care services increased over the past two years and are expected to continue to rise. The average daily cost for an assisted-living facility is now more than $100, or $3,241 per month. What’s more, the average daily cost of a private room in a nursing home is now $217, or $79,205 annually.

— Home health care experienced the smallest rate increase, rising just 5 percent over the past two years. The average hourly rate for a home health aide/certified nursing assistant increased by $1 in the past two years, to $21.

— Costs for long-term care services continue to vary significantly by location, with Alaska, New York City, and Stamford, CT consistently being the most expensive areas for nursing home and assisted living facilities, and Oklahoma City, St. Louis, and South Dakota being the least expensive.

In addition to the report being available to consumers on www.prudential.com, Prudential is also launching an updated interactive consumer cost of care mapping tool on its website at www.prudential.com/insurance/longtermcare, designed to provide more in-depth State-specific cost detail – and in some cases City-specific – aimed at arming consumers with essential facts to help them make better financial decisions. "While consumers understand the importance of planning for their financial future, they continue to have misperceptions about the costs of long-term care services and the benefits of long-term care insurance. Our resources can help them dispel these myths and put them on the right path to securing their retirement," added Mako.

 

Joe Pioletti
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