Every year around this time several carriers who offer long term care insurance policies come out with their annual cost of care survey for the nation. These surveys can provide great insight and valuable information for those who have purchased long term care insurance and those who are considering it. It can also be very valuable for those individuals who have decided to self-insure their long term care risk. We utilize this surveys to assist families, couples, and individuals on how much benefit they should obtain based on where they live or where they plan on living when the receive care. The survey we prefer to use is made available through Genworth Financial. There are a few reasons why we prefer Genworth’s survey versus some of the other carriers. The first is because Genworth has been issuing long term care coverage longer than most carriers in the marketplace. The second reason is due to the fact that this is the 8th year the survey has been completed. My understanding is that the survey was initially done by a company called CareScout, who continues to provide the information for the survey. However, it is my understanding that Genworth acquired them in the last few years.
My understanding, as far as how the data is obtained, involves a thorough survey of long term care providers across the country. From that they develop regions, and based on the findings they establish averages for the nation, state, and region.
Interestingly, I was in a meeting last week with an individual, who unbeknownst to me, had made phone calls to two different nursing home facilities in his area (prior to our meeting we had not discussed any policy particulars or benefit amounts). I had designed a proposal for him based on where he lived using information from the Genworht 2010 Cost of Care Survey. In his particular case the average daily cost of care was $200 or $6,000 over a 30-day period. It turns out one the nursing homes he had called told him the monthly cost was $7,000, while other facility quoted him $5,000 per month. It was either my lucky day or CareScout and Genworth really know what their doing, because if you take the average of the two nursing home quotes he received ($7,000 and $5,000) you get an average cost of $6,000 over a 30-day period, which is exactly what I was proposing (at this point in my life I know I’m not quite that lucky so all of the credit should go to the survey).
With that said, let’s take a look at a few of the results:
- The average cost of Nursing Home (semi-private) care rose from $185 per day to $193 per day.
- Over a six-year period the annual growth of nursing home (semi-private) care has increased by 4.52%.
- Home Health Aide and Homemaker Services remained unchanged at a $19 and $18 national median hourly rate, respectively.
- The national median hourly rate remained unchanged for Adult Day Health Care at $60 per hour.
State of California:
- The average cost of Nursing Home (semi-private) care rose from $200 per day to $213 per day.
- Over a six-year period the annual growth of nursing home (semi-private) care has increased by 5%.
- Home Health Aide and Homemaker Services remained unchanged at a $21 and $20 national median hourly rate, respectively.
- The national median hourly rate remained unchanged for Adult Day Health Care at $77 per hour.
As you can see, it does cost more to receive long term care in California than in some other states. These numbers are based on statewide averages. I would encourage you to look at the cost of care in your particular city or county, or do what my client did and call a couple around town to get more information. Also, I would encourage you to learn more about the the cost in your area by visiting the Genworth 2011 Cost of Care Survey website. All of the data in this post was obtained from this report, so I would like to thank Genworth and CareScout for putting this survey together. If used properly it can be one of the most valuable tools available for properly evaluating and advising on individuals long term care needs.