As your clients approach retirement, they may worry about whether they’ll be able to survive financially if they need long-term care — or need to provide it for a family member.
The latest edition of Genworth Financial’s annual study on the cost of long-term care will provide no comfort on that score. Costs have continued to increase at a substantial rate, and the annual cost for care in the priciest states are enough to give anyone pause—particularly if their retirement nest egg isn’t very large; a single year’s care in a nursing home can eat up every cent that many people have saved.
The only “good” news this year, the 13th of the study, by Genworth, an insurer that provides long-term care coverage, is that the cost for adult daycare has actually declined since 2015, falling 1.25%. But that’s small consolation, considering that adult daycare has experienced a five-year annual growth rate of 2.53%. Only nursing home care has had a higher cost growth over the same period, at 3.51% for a private room.
There’s no denying LTC is expensive, whether provided by a hired health care worker or residence in an assisted living facility or nursing home. But even if the primary caregiver is a member of the family, and the patient is not receiving paid care but is still at home (or in the caregiver’s home), the cost can still be high to the caregiver.
First there’s the financial cost — outside of any actual medical care that may be covered by an insurance policy, caregivers who also provide financial assistance to their loved ones estimate that it costs them an average of $10,000 in out-of-pocket expenses. That can include household expenses, personal items, transportation, or even informal caregivers or LTC facilities. Often that money comes out of the caregiver’s own retirement savings or daily budget, cutting either their present or future standard of living.
Then there’s the emotional and physical toll. Although 83% of caregivers said they experienced some positive feelings about caring for a loved one, 43% said the LTC event negatively affected their personal health and well-being; 41% experienced negative physical side effects, such as depression; nearly 33% reported an extremely high level of stress; and 55% did not feel qualified to provide physical care.
Genworth’s Cost of Care Survey, conducted by CareScout, provides not just the data, but includes a mobile app on Genworth’s website and an interactive map. The data, from more than 47,000 provider survey outreaches, comes from 440 regions across the country, covering all 50 states and Washington, D.C. Also included are potential cost growth rates, as well as a look at how expenses in each category have risen over the past 5 years.
Of course, care costs considerably more in some states than in others. Following are the 15 most expensive states for LTC:
Average Annual Cost: $58,256
Adult day care: $24,310
Licensed home care: $52,624
Assisted living: $48,780
Nursing home (private room): $107,310
Average Annual Cost: $58,747
Adult day care: $20,020
Licensed home care: $54,912
Assisted living: $48,000
Nursing home (private room): $112,055
Average Annual Cost: $59,047
Adult day care: $17,680
Licensed home care: $56,834
Assisted living: $54,000
Nursing home (private room): $107,675
Average Annual Cost: $62,634
Adult day care: $28,080
Licensed home care: $54,340
Assisted living: $59,892
Nursing home (private room): $108,223
11. Rhode Island
Average Annual Cost: $62,711
Adult day care: $19,500
Licensed home care: $57,200
Assisted living: $59,169
Nursing home (private room): $114,975
Average Annual Cost: $62,721
Adult day care: $32,032
Licensed home care: $53,768
Assisted living: $58,320
Nursing home (private room): $106,763
9. North Dakota
Average Annual Cost: $63,386
Adult day care: $20,215
Licensed home care: $63,972
Assisted living: $40,080
Nursing home (private room): $129,276