Home Care Costs Rise Again in California

The cost of long-term care from a home health aide has increased in California and nationally, according to a Genworth study. Long term care costs are up in all care settings in California from 2015. Home is where most Americans get long-term care. “Although home care costs are much less expensive than those in facility-based settings, the costs can add up to as much as $54,912 per year in California, which is why it’s imperative for consumers to begin planning now for how they will pay for that care should they need it,” said Tom McInerney, president and CEO of Genworth. He noted that at least 70% of Americans 65 and over will need some form of long-term care and support. The following are key trends in California’s major metropolitan areas:

  • The cost of care in a semi-private nursing home in Los Angeles is 8.8% less than the state average, at $6,935 per month.
  • Home health aides cost 18.52% more in the San Diego metro area than the national average, at $4,576 per month.
  • The cost of private nursing home care in San Francisco is $15,193 per month, which 97.36% more  than the national average.

Americans Greatly Underestimate the Cost of Homecare

The average American underestimates the cost of in-home care by almost 50%, according to a Genworth study. Thirty percent say that home care costs less than $417 a month when the national median rate is $3,861 a month for an in-home aide or $3,813 a month for homemaker care. Homemaker costs are up 2.6% from 2015, marking the highest year-over-year increase across all care categories. In comparison, home care aide services rose modestly at 1.25% since 2015. Over the past five years, home maker costs have risen 11% and 6.6% for health aides.

Interestingly, people who stand to be affected most by long term care events are more likely to underestimate the cost of care. This includes women (who are more likely to enter caregiving roles), single adults (who may not have a partner to rely on for caregiving needs), and younger adults (aged 25 to 45), who are more likely to deal with the reality of a parent needing care).

The national median cost of care rose across all care settings, except adult day care, which decreased slightly. The monthly cost of a private nursing home room is $7,698, up 1.24% from 2015. The cost of a semi-private room is up 2.27% to $6,844 a month. Assisted living communities saw a slight increase in costs of .8% to $3,628 a month. Adult day care costs fell 1.25%.

Caregivers Face A Career Crisis

Providing care for loved ones has taken a toll on the careers of half of caregivers with 11% losing their jobs and another 10% having to change careers.  That’s in addition to the other financial, physical, and emotional effects of caregiving according to a Genworth study.

Fifty-one percent of caregivers say that that caregiving responsibilities impeded their ability to perform their jobs. The survey also reveals the following:

  • 77% missed some work during the past year, up 19% in 2010.
  • Caregivers missed an average of seven hours of work per week.
  • 19% missed 10 or more hours of work per week.

As a result of their caregiving responsibilities:

  • 11% lost their jobs.
  • 10% had to change careers.
  • 12% had to change positions.

Approximately one-third of caregivers provided 30 hours or more of care a week.  On average, caregivers lost one-third of their income. The study also highlights several factors that contribute to respondents’ reluctance to plan early. Thirty percent didn’t want to admit that long-term care may be needed and 25% didn’t want to talk about the issue.

Caregivers who had long term care insurance were reimbursed for 23% of their qualified out-of-pocket expenses. Forty-eight% of care recipients had considered the possibility needing long-term care, but only 26% made a plan to cover their potential needs. Even planners felt they could have been better prepared; 63% said they should have taken steps sooner, which would have led to reduced stress.

Americans Lacking in Retirement Planning

Fifty-three percent of adults have not started making financial arrangements for retirement. Forty percent say that not having saved enough for retirement is their biggest financial regret, according to a Genworth study. Forty-six percent of Americans would give themselves a poor or failing grade when it comes to their retirement contributions. Health during retirement is a concern among 71% while the state of finances is a concern among 63%.

Interestingly, the average age is 33 among those who have started making retirement arrangements. Respondents also report average annual retirement savings of $7,360 and median saving of $500.

Rising Costs Should Prompt LTC Conversations

The cost of long term care, which is is outpacing inflation, it creating significant financial planning challenges for the nearly 12 million Americans who need long-term care services. The cost of in-home care continues to rise, though at a more moderate rate of growth. This is good news for consumers as almost three quarters of people who need long term care prefer receiving it in their homes, according to the Genworth 2014 Cost of Care Survey. Nationally, the 2014 median hourly cost for the services of a homemaker is $19 and $19.75 for home health aide hired from a home care agency. Homemaker costs have risen 1.2% a year over the past five years. Home health aide services have risen 1.32% a year. The costs of assisted living facilities are rising much faster. The median annual cost for care in an assisted living facility is $42,000, which is an increase of 4.29% annually over the past five years. The comparable cost for a private nursing home room is $87,600, which has increased 4.19% annually over the past five years. For more information, visit www.genworth.com.

These Groups Have the biggest Gaps in Life Coverage

Consumer groups with the biggest life insurance coverage gaps are unmarried parents, large families, women, and those with certain common health conditions, according to a white paper by Genworth. Brian Bulakites of Genworth said, “Consumers often believe life insurance costs nearly three times its actual price; this is a major contributor to the large coverage gap we’re seeing in these four groups.”

Fifty-nine percent of unmarried women have no life insurance compared to 43% of those who are married. Sixty-nine percent of unmarried fathers have no life insurance, compared to 34% of married fathers. Forty-three percent of married mothers have no life insurance, compared to just 34% of married fathers.

The study authors note that many commonly diagnosed health issues – like asthma and depression – are no longer barriers to receiving preferred rates on life insurance, which helps financial professionals close the coverage gap. The white paper includes a checklist that can help consumers identify changing needs and determine which financial obligations should be covered by a policy. For more information, visitgenworth.com/lets-talklife.

Last Updated 10/09/2019

Arch Apple Financial Services | Individual & Family Health Plans, Affordable Care California, Group Medical Insurance, California Health Insurance Exchange Marketplace, Medicare Supplements, HMO & PPO Health Care Plans, Long Term Care & Disability Insurance, Life Insurance, Dental Insurance, Vision Insurance, Employee Benefits, Affordable Care Act Assistance, Health Benefits Exchange, Buy Health Insurance, Health Care Reform Plans, Insurance Agency, Westminster, Costa Mesa, Huntington Beach, Fountain Valley, Irvine, Santa Ana, Tustin, Aliso Viejo, Laguna Hills, Laguna Beach, Laguna Woods, Long Beach, Orange, Tustin Foothills, Seal Beach, Anaheim, Newport Beach, Yorba Linda, Placentia, Brea, La Habra, Orange County CA

12312 Pentagon Street - Garden Grove, CA 92841-3327 - Tel: 714.638.0853 - 800.731.2590
Email:
Jay@ArchApple.com
Copyright @ 2015 - Website Design and Search Engine Optimization by Blitz Mogul