By: Melissa Barnickel at Baygroup Insurance
For 16 years, Genworth Financial has been producing what is considered the gold standard report on the cost of long term care. Other surveys have come and gone, but this one has remained the same.
Most people have no idea what long term care costs because they have never bought it! Even those that have an awareness of the cost through personal experience can be unaware of the difference in price based on your location. It’s important to realize that cost of care varies dramatically by your geography and the type of care you select. That’s why national care surveys can be so valuable. After all, as the Genworth website proclaims, “Knowing the cost is a first step to helping you plan for it.”
Personally, we at Baygroup Insurance couldn’t agree more. However, it’s important to keep in mind that today’s cost of long term care is less important than what the cost will be when long term care is needed. And that time horizon may be very long; perhaps 20, 30, 40, or even 50+ years after the purchase of long term care insurance, depending on your age when you buy it.
That’s where the current edition of Genworth’s Cost of Care Survey really shines. It emphasizes the accelerating inflation rate for home care. For example, the cost of homemaker services (cooking, cleaning, and running errands) – which has notoriously been relatively stable for decades – has increased dramatically in recent years. Although the five year rate of growth was 3.44%, the cost over the most recent year increased by 7.14%!
The survey attributes to cost increase to several factors, including:
- Wage pressures
- Regulatory changes
- Labor shortages/low unemployment
- Sicker patients
- Employee retention challenges
Home health aide services have also increased above their five-year rate of 3.09%; to 4.55% in the last reported year. However, assisted living facility and nursing home facility costs posted annual rate increases well below their 5-year average – 1.28% and 0.96%, respectively.
This Genworth survey shows that the prospect of increasing costs for home care – which is the type most policyholders prefer – is sobering, and somewhat scary. Perhaps that’s why the survey was released so close to Halloween? After all, planning for long term care costs without a great policy can be quite – shall we say – tricky?! A treat of a long term care insurance policy may be just what you need!
In this country, the best financial planning for your future involves a solid long term care plan. Feel free to contact Baygroup Insurance at http://www.baygroupinsurance.com/forms/contact-us or call us at 410-557-7907 for more information about how best to plan for long term care of yourself and those you love.