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NEW YORK » The steep cost of caring for the elderly continues to climb. The median bill for a private room in a nursing home is now $91,250 a year, according to an industry survey out Thursday. In Hawaii it is $135,050.
The annual "Cost of Care" report from Genworth Financial tracks the rise in expenses for long-term care, a growing financial burden for families, governments and insurers like Genworth. The cost of staying in a nursing home has increased 4 percent every year over the last five years, the report says. Last year the median bill was $87,600.
"Most people don’t realize how expensive this care can be until a parent or family member needs it," said Joe Caldwell, director of long-term services at the National Council on Aging. "And then it’s a real shock."
The annual report from Genworth, which sells long-term care policies, looks at costs for a variety of services, including adult day care, and home health aides. And nursing home bills are rising at the fastest pace, twice the rate of U.S. inflation over the last five years.
For its report, Genworth surveyed 15,000 nursing homes, assisted-living facilities and other providers across the country in January and February. It found wide differences from state to state. In Oklahoma, for instance, the median cost for a year in a nursing home came out to $60,225. In Connecticut it was $158,775. Alaska had the highest costs by far, with one year at $281,415.
So, who pays the nursing-home bill? "A lot of people believe Medicare will step in and cover them, but that’s just not true," said Bruce Chernoff, president and CEO of The Scan Foundation, a charitable organization. Medicare will cover some short visits for recovery after a surgery, for instance, but not long-term stays.
Often, experts say, senior citizens wind up spending their savings until they hit their last $2,000, and at that point they can turn to Medicaid, the government’s health insurance for the poor, to help cover the bill. As a result, Medicaid pays for more than half of the country’s long-term care bill. That cost accounts for more than a quarter of Medicaid spending, according to the Kaiser Family Foundation.
Caldwell described Genworth’s survey as essentially a marketing pitch. "Of course they want people to see how much it costs to sell long-term care insurance," he said. "What they’re not telling you is that the long-term care coverage is becoming more and more unaffordable for middle-class families."
Mounting costs have also pushed many insurance companies out of the business. Four of the five largest providers have either scaled back their business or stopped offering new policies. Even Genworth, the largest provider, has struggled under the weight of old policies.
Less-intensive care remains much cheaper than staying at a nursing home, according to Genworth’s survey. One year in an assisted-living facility runs $43,200 nationally and $48,000 in Hawaii. The median hourly cost for services of a home health aide hired from an agency is $20, or $24 in Hawaii.
