Every baby boomer needs to think about long term care needs and costs. The odds are quite high that one of you will need it. Can you afford it?
Genworth Financial is a long term care insurance provider. It publishes results of annual surveys of long term care costs, both nationally and by individual state and city. The 2011 survey results were interesting, at least to me.
First, home care costs remained flat while institutional care costs continued to rise. Genworth commented on this trend as follows:
Home care rates have remained flat in part because of increased competition among agencies and the availability of unskilled labor, and by avoiding costs associated with maintaining stand-alone health care facilities.
Genworth’s own data shows that most consumers prefer to receive long term care in their homes. Indeed, two-thirds of Genworth’s initial long-term care insurance claims are for in-home benefits.
The cost of long term care can vary substantially from state to state. For nursing home care in a semi-private room, the U.S. average median annual rate is $70,445. The state with the highest median annual rate is Alaska at $222,285. The state with the lowest median annual rate is Texas at $46,355. (Another reason not to retire in Alaska!)
The national median daily rate for a private room in a nursing home is $213. This is an increase of 5.1% over 2010 and is part of a six-year annual growth rate of 4.35%.
Assisted living facilities come with a national median monthly rate of $3261, a 2.4% increase over 2010 and part of a six-year aaverage annual growth rate of 5.99%,
It is obvious to me from these trends that for long term care insurance to work, you need to purchase inflation protection for the coverage amount.
To see the data in more detail, including the ability to generate a long term care cost report for your own state and city, here is the link: 2011 Cost of Care: Long Term Care Survey.
I encourage you to read it carefully and plan ahead for your own long term care future.