U.S. long-term care costs are up just a little this year, but they’re enormous.
John Hancock Insurance, a Boston-based unit of Manulife Financial Corp., is trying to give consumers, and their long-term care planning advisors, an idea of just how enormous with the release of its 2016 long-term care cost report. The report could be relevant to advisors who are using life insurance, annuity contracts or other instruments to set up LTC plans as well as those who specialize in sales of stand-alone long-term care insurance.
John Hancock based the latest version of the report on data from LifePlans, a Waltham, Massachusetts-based long-term care data and services company.
LifePlans surveyed 16,000 care providers throughout the United States to come up with community averages for the cost of a private room in a nursing home, a shared room in a nursing home, an apartment in an assisted living facility, help from a home health care provider, and use of an adult day care facility.
LifePlans conducted a similar survey in 2013.
The most expensive form of care, a stay in a private nursing home room, will cost about $103,000 per year this year, and that cost has been increasing an average of 3.1 percent per year over the past eight years, according to the survey data.
The cost of the least expensive form of care, use of adult day care for a year, will cost about $21,000, and the cost of that form of care has been rising about 1.5 percent per year.
Professional long-term care planners will need to study the full report themselves to see the data for the communities they serve, and the data for communities clients might see as havens from high long-term care costs in the places where the clients live now.
Prices vary because of factors such as differences in the underlying cost of living, the strength of the job market, state Medicaid reimbursement rules, state long-term facility licensing rules and monitoring programs, consumer preferences, owner preferences, and organizations’ interest in the long-term care services market.
In many markets, for example, John Hancock had to put “not applicable” in the adult day care column, because the LifePlans survey team could find no adult day care providers in those communities who were willing to participate in a cost survey.
For a taste of how much costs can vary, here’s a look at the places in the survey where the various types of care included cost the least, and the most.
At the state level, Alaska usually leads in rankings of the cost of a private room in a nursing home. (Image: Thinkstock)
1. Nursing home: Private room
Cheapest: Jefferson City, Missouri ($142 per day).
Most expensive: Juneau, Alaska ($600 per day).
A day in a shared nursing home room in some communities in Missouri is cheaper than a day in adult day care in New York. (Photo: Allison Bell/LHP)
2. Nursing home: Shared room
Cheapest: Columbia, Missouri ($130 per day).
Most expensive: Fargo, North Dakota ($501 per day).
Developers began preparing for the aging of the boomers in Florida early on, and that might help hold down care prices there. (Photo: iStock)
3. Assisted living facility apartment
Cheapest: Miami ($1,720 per month).
Most expensive: Teaneck, New Jersey ($12,927 per month).
Related: Lincoln makes LTC cost data dance
For people who want to get care at home, Alabama has bargains. (iStock)
4. Home health aide
Cheapest: Fort Lauderdale, Florida ($15 per hour).
Most expensive: Minneapolis ($31 per hour).
New York City is an expensive place to get day care for children, and it’s also an expensive place to get day care for adults. (Photo: Thinkstock)
5. Adult day care
Cheapest: Montgomery, Alabama ($22 per day).
Most expensive: New York ($203 per day).
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