Cost of Long-Term Care Rising Faster Than Inflation

Genworth’s 2019 Cost of Care survey shows the average cost for a home healthcare worker rose 4.55 in 2019. The survey also surmises that a staggering “10,000 Baby Boomers turn 65 everyday until 2030 and 7 out of 10 will require long-term care in their lifetime.”

Think about it. That is 70 percent of the senior pool which will need LTC. Unfortunately, the cost of long-term care is rising faster than the rate of inflation, according to the Genworth 2019 Cost of Care Survey.

Genworth has been studying the cost of long-term care in America for the past 16 years to aid consumers in their insurance purchases. The survey published in 2019 surveyed over 400 state counties to document the LTC costs in each county. The survey reviewed costs for all types of LTC services from at home healthcare, to assisted living communities, to nursing homes.

The glaring trend is that LTC costs are spiking, increasing each year. Along with the aging Baby Boomer population, i.e. tentative rise in demand for LTC clientele.

The Genworth survey data shows all LTC services percentage increases averages 2.62 percent for the last 15 years. To put this into perspective, the U.S. rate of inflation is 2.1 percent, according to the U.S. Department of Labor, Bureau of Labor Statistics.

“From 2004 to 2019, the cost for facility and in-home care services has risen on average from 1.71 percent – 3.64 percent per year. That’s an increase of $892 annually for home care and up to $2,468 annually for a private room in a nursing home,” the Genworth survey stated. “At this rate, some care costs are outpacing U.S. inflation rate of 2.1 percent by almost double.”

The service that increased most sharply was for a private room in a nursing home. The cost in 2004 was $65,185 annually, and in 2019 the cost was $102,200.

The most dramatic cost increase was for assisted living facilities which increased 68.79 percent in cost over the last 15 years, noted the Genworth survey.

Reasons for the climbing LTC costs are not just due to the higher demand, there are instigating factors pushing the costs higher in order to retain healthcare workers and address regulatory measures on the industry.

LTC insurance is designed to kick in and fund qualifying services so that you aren’t faced with the financial burden alone. LTC insurance premiums do fluctuate annually with the rise and fall of the interest rate in the U.S. marketplace.

The The National Association of Insurance Commissioners (NAIC) is a nonprofit watchdog over consumers’ best interests in the insurance industry. The organization regulates insurers on premium rate increases to their products. Insurers must send the NAIC notice of any proposed raise in premiums 30 days before the policyowners are notified. Then, the insurer needs to submit documentation to support the validity of the price increase. 

Section 20 of the NAIC Long-Term Care Insurance Model Regulation states insurers are regulated on premium increases for their LTC insurance policyholders that have fluctuating premiums annually. Insurers need to disclose “the analysis performed to determine why a rate adjustment is necessary,” states NAIC LTC regulation. Essentially, the insurer needs to provide black and white evidence that the rate increase is justified. 

LTC is going to be the least expensive to obtain when you are young and healthy. Although not all LTC insurance products offer fixed rates, you will begin at a lower jumping off spot than others. 

Visit our Consumer Insurance Guide home page and click on the “Long-Term Care” link to the left of your screen for a LTC insurance quick link to instant quotes from our business associate LTCI Partners.

LTCI Partners is a nationally licensed firm that makes it easy to learn more about long-term care insurance. They are your advocates and work with you by phone – no agent will come to your home.

LTCI Partners will be in contact with you in the next day or two. However, you may always call them for coverage insight. If you wish to talk with them, you can call the LifeQuotes Long-Term Care Program at 855-568-6233.

Additionally, we will not rent, sell or disclose, to any other party, your e-mail address or personal information.

COMMENTS

  • nilacourtney

    Definitely imagine that which you said. Your favourite justification appeared to be at the web the simplest factor to take into account of. I say to you, I certainly get irked whilst other folks think about issues that they plainly don’t recognize about. You controlled to hit the nail upon the highest and outlined out the entire thing without having side effect , other folks can take a signal. Will probably be again to get more. Thank you

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.