Skilled nursing facilities saw the lowest cost increase compared to other long-term care settings in 2021.
The national annual median cost for a semi-private room in a skilled nursing facility increased by 1.96% to $94,000 while a nursing home private room increased by 2.41% to $108,405, according to the Genworth 2021 Cost of Care Survey.
Alaska’s annual cost for both private and semi-private rooms in skilled nursing was higher than any other state at $378,140 for both types of rooms – the second highest state SNF cost was Connecticut at $165,163 for semi-private rooms and $182,044 for private rooms.
Hawaii, Massachusetts and New York rounded out the top five states with the highest cost of both semi-private and private rooms.
Compared to skilled nursing costs, the average annual cost of a home health aide increased the most at 12.5% – hands-on personal assistance with activities like bathing, dressing and eating costs $61,776 on average, the survey found.
The most substantial increase coincides with a growing demand of an aging society to receive care in the home for as long as possible, according to Genworth. All long-term care avenues have increased between 2% and 6% in the last five years, Genworth said.
“The Cost of Care Survey has once again underscored the importance of planning ahead for long-term care costs and highlighted the need to consider where and how a person wants to receive care,” Brian Haendiges, president and CEO of Genworth U.S. Life Insurance, said in a statement.
Homemaker services and assisted living facilities fell somewhere in the middle in terms of cost increases, increasing 10.64% and 4.65% respectively.
Richmond, Virginia-based Genworth Financial Inc. (NYSE: GNW) is a Fortune 500 insurance holding company specializing in long-term care and mortgage insurance. Genworth contacted more than 67,000 long-term care providers across the post-acute care continuum to complete almost 15,000 surveys.
Genworth started tracking the cost of long-term care in 2004.
Genworth expects costs to increase looking ahead given more demand on the system – every day until 2030, 10,000 Baby Boomers will turn 65, the report noted, and seven out of 10 of those individuals will need long-term care services.
The company’s cost of care calculator shows semi-private and private room costs for nursing homes to increase by just under 30% in 10 years, if the annual inflation rate changes 3%.
Survey findings indicate labor costs will continue to be a significant driver in future cost increases, while costs associated with personal protective equipment (PPE), testing, vaccination status tracking and quarantining are likely to taper off.
Genworth’s prediction on COVID-19 protocol-related costs comes with a caveat – “wide variability” across regional markets is likely, depending on state and local regulations, demographics and population shifts, Genworth said in its survey results.
“There is fierce competition for a limited number of care professionals, and many are leaving the industry in pursuit of higher paying jobs or because of concerns about potential exposure to COVID-19 while on the job,” Haendiges said in the statement. “The costs of recruiting, retaining, and training new care professionals is likely to remain high as we approach 2023.”
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