Assisted living costs rose 6.67% from 2017 to 2018. Workforce shortages could be to blame, according to a new report from Genworth.
A shortage of skilled labor contributed to a dramatic spike in assisted living costs from 2017 to 2018, according to the latest cost-of-care survey released by Genworth, an insurance company providing long-term care insurance and planning.
The 15th annual Genworth Cost of Care Survey found that assisted living costs rose 6.67% from 2017 to 2018. The latest cost increase is nearly double the 3.36% spike assisted living communities experienced from 2016 to 2017.
ASSISTED LIVING COSTS
The national median cost for a 1-bedroom residence in a private-pay assisted living community is now $4,000 per month, or $48,000 per year, according to the survey. That cost has risen 67% since 2004, when the median cost for the same type of residence was $28,800.
Assisted living costs vary by state. Monthly assisted living costs for 2018 were highest in:
- District of Columbia ($9,266),
- Alaska ($6,300), and
- New Jersey ($6,065).
Monthly costs for 2018 were lowest in:
- Missouri ($2,844),
- Arkansas ($3,037), and
- Georgia ($3,100).
WHY COSTS ARE RISING
Nationally, the blended annual median cost of long-term services and supports increased an average of 3% from 2017 to 2018, according to a statement from Genworth. After assisted living, a semi-private room in a nursing home experienced the highest annual median increase: 4.11%.
Several factors are driving up the cost of care across all care options, according to providers surveyed by Genworth.
Many of those factors are associated with the difficulty associated with attracting and retaining qualified workers. Typically, providers are paying higher salaries for the best workers, and paying more overtime to cover shifts with fewer workers, reports Genworth. Higher minimum wage requirements in some states, and changes in overtime pay rules, are also increasing costs.
Rising acuity among assisted living residents also contributes to rising costs, according to Genworth. The company cited:
- The growing incidence of Alzheimer’s Disease and dementia, which is increasing the need for more specialized care and higher hourly wages; and
- The need for specialized, intensive, and expensive levels of care among older Americans who wait too long to receive LTSS.
In addition to assisted living, the Genworth report includes costs for nursing homes, adult day services, home health services, and homemaker services. In 2018, median costs were:
- $245 a day for a semi-private room in a nursing home, up 4.11% since 2017.
- $275 a day for a private room in a nursing home, up 3% since 2017.
- $72 a day for adult day health services, up 2.86% since 2017.
- $22 an hour for home health aide services, up 2.33% since 2017.
- $21 an hour for homemaker services, up .24% since 2017.
Article reprinted from LeadingAge National. View the article on their website.