The cost of a stay in a semiprivate room in a nursing home increased the most: 9.2%. Semiprivate nursing home rooms may have benefited from being a relatively affordable option for people who had a clear need for high-level care but who wanted to socially distance.
LTCG is an Eden Prairie, Minnesota-based company that helps insurers manage their LTCI operations. The company has based the latest cost of care study on responses from about 30,000 U.S. providers.
Here’s what happened to average annualized U.S. LTC costs between 2019 and 2020:
- Home health aide services: $58,619 per year (up from $56,399)
- A studio room in assisted living facility: $57,610 per year (down from $58,553)
- A semi-private skilled nursing facility room: $98,129 per year, (up from $89,899)
- A private skilled nursing facility room: $112,291 per year (up from $109,231)
The cost of care varies widely from state to state.
The most expensive figure in the Mutual of Omaha/LTCG data table is, as usual, the annual cost of a private nursing home room in Alaska: $183,600. That cost was actually down from $248,130 in in 2019.
The most affordable figure in the data table is a year of care from a home health aide in West Virginia, which fell to $47,384 in 2020, from $49,284 in 2019.
Typical purchasers of long-term care insurance are under the age of 65, and years away from needing LTC services.
Mutual of Omaha says long-term care planners should try to help clients think about what care might cost in 2046.
If average U.S. home health aide costs increase 3% per year, for example, the annual cost of home health aide services could rise to more than $126,000 in 2046, according to Mutual of Omaha calculations based on the LTCG data.
Financial professionals also can put other figures, such as 1% or 10%, in the assumed inflation rate field.
What the Numbers Mean
Like other surveys put out by long-term care insurance issuers, the new Mutual of Omaha cost-of-care report shows that three years of long-term care can easily cost as much as a small house.
Mutual of Omaha says showing consumers what care costs is a good way to get them to think about LTC planning options.