Newark, N.J. — A new research report from Prudential Financial Inc. finds 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. The findings are significant in light of data from the U.S. Census Bureau, which estimates that by 2030, the number of Americans aged 65 and older will more than double to 71 million, comprising approximately 20% of the U.S. population.
“Many Americans mistakenly believe that Medicare or private health insurance will pay for their long-term care needs,” says Andy Mako, SVP, long-term care insurance, Prudential. “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.”
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 results show the average assisted living costs and average nursing home costs in Alaska as the most expensive in the country at $82,956 per year and $183,595 per year respectively. Detroit ranked the highest for home health care hourly rate at $38.
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% 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.
To help its consumers plan, Prudential is also launching an updated interactive cost of care mapping tool. The tool is 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,” Mako says. “Our resources can help them dispel these myths and put them on the right path to securing their retirement.”
Source: Prudential Financial Inc.
