Home care inflation rate only 2.5%
Genworth, the largest long-term care insurance company, just released their 2017 cost of care survey.
“Knowing the costs of different types of care – whether the care is provided at home or in a facility – can help you plan for these expenses. The 2017 survey, conducted by Carescout®, is one of the most comprehensive of its kind, covering 440 regions across the U.S. and based on data collected from more than 15,000 completed surveys.”
Although the cost of care has continued to rise each year, Genworth’s survey reveals that the cost for home health services has increased an average of only 2.5% each year for the past 5 years. Scott Olson, co-owner of LTCShop.com explained in a recent online forum, “The long-term care inflation right is very different from the medical inflation rate. Medical inflation is driven by costly research and development, expensive prescription drugs, and highly trained personnel. The long-term care inflation rate is driven primarily by the labor market. The cost of labor has been relatively low over the past decade.”
Genworth’s survey revealed the 5-year average inflation rate for all of the main care settings:
2.50%
Home Care provided by Home Health Aides
2.59%
Assisted Living Facilities
2.79%
Adult Day Care
3.76%
Private Room in a Nursing Home
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“This is good news for consumers,” Olson explained. “Many of the older long-term care policies have had large rate increases, especially those policies with a 5% compound inflation benefit. In many cases, a rate increase can be avoided by reducing your policy’s inflation benefit from 5% to 3%, which is more in-line with current trends.”
This is also good news for people purchasing long-term care insurance today. “Of the 13 companies selling long-term care insurance today, 10 of them offer a 2% or 3% inflation benefit. These options are very affordable and meet the inflation benefit requirements for most of the states involved with the Long-Term Care Partnership Program,” Olson added.