People want to stay in their homes as they age for a variety of reasons, some for the familiarity, social connections, autonomy, or the cost, but a new report shows that it may be more expensive to grow old in your own home than in an assisted-living facility.
Over the past year, inflation and the cost of skilled workers has pushed up overall healthcare costs, but the biggest jumps came in areas such as home health services and homemaker services — the key components of helping older adults age in place.
The cost of long-term-care services increased across the board with cost hikes in the range of 1% to 10%, according to the 2023 Genworth Cost of Care survey. Inflation was the top factor contributing to cost increases for assisted living facilities, while a shortage of skilled workers was the top contributing factor for homecare services and nursing homes, the survey said.
The areas of care that saw the biggest jump in costs were in the costs of a home health aide, which includes “hands-on” personal assistance with activities such as bathing, dressing, and eating. The price tag has increased to an annual median cost of $ 75,500, up 10% from 2022 and up 22.2% from 2021, Genworth said. (That’s based on 44 hours a week for 52 weeks.) The median cost of a home health aide runs about $ 33 an hour, according to the survey.
Homemaker services, which include assistance with “hands-off” tasks such as cooking, cleaning, and running errands, jumped to an annual cost of $ 68,600, up 7.1% from 2022 and 15.4% from 2021, Genworth said. The median cost for homemaker services is $ 30 an hour, according to the survey.
As many as 77% of adults 50 and older want to age in place in their homes, according to AARP. Yet to accomplish that, 70% of older adults will need some support to age in the home of their choice, according to Harvard University’s Joint Center for Housing Studies.
Home Instead, a company that provides home care services, said helping older adults stay in their home helps with familiarity and routine, independence and autonomy, community connections as well as costs. Home Instead said its average client is over 80 years old.
However, the cost of an assisted living facility is actually lower than full-time help at home. Assisted-living facility rates increased by 1.4% to an annual national median cost of $ 64,200 a year, according to Genworth.
Nursing homes still outpace assisted living when it comes to costs. The national annual median cost of a semiprivate room in a skilled nursing facility rose to $ 104,000, an increase of 4.4%, while the cost of a private room in a nursing home increased 4.9% to $ 116,800, Genworth said.
“As we look at this year’s data, costs are up, but not as drastically as in previous years, especially assisted-living facilities, which only increased 1.4% from 2022 to 2023, but a total of 18.9% from 2021 to 2023. This is likely due to inflation and housing market trends stabilizing postpandemic,” said Jamala Arland, president and CEO of Genworth U.S. Life Insurance.
The Genworth report comes as the number of Americans turning 65 is increasing and is expected to weigh on infrastructure and institutions, including healthcare, housing, work and finances.
“With 10,000 baby boomers turning 65 every day until 2030, and 7 out of 10 of them likely to need long-term care services and support at some point, there is increased demand for skilled workers in the long-term care space,” Arland said.
Healthcare costs in retirement have the potential to be enormous. According to Fidelity Investments, a 65-year-old retiring in 2023 should expect to spend an average of $ 157,500 for health and medical expenses throughout retirement.
In most cases, Medicare doesn’t pay for custodial care, which helps with activities of daily living like bathing, dressing, using the bathroom, and eating, according to the U.S. Centers for Medicare and Medicaid Services.
To shoulder the cost of home care, Home Instead suggested looking into long-term-care insurance or turning to local areas on aging for resources in your community. If the patient is a veteran, benefits or services may be available through the Department of Veterans Affairs, it said.
Read more about aging in place:
Can aging boomers rescue the ailing commercial real-estate industry? This $ 2 billion fund is betting on it.
Older people don’t want to sell their homes, and that could cause problems for everyone
Low-income seniors get housing help, but ‘there is a need for even greater funds’
