Latest News / Why COVID-19 Will Continue to Drive Higher Costs for Long-Term Care
Why COVID-19 Will Continue to Drive Higher Costs for Long-Term Care
March 15, 2022
Public health experts believe that the COVID-19 pandemic is transitioning to the endemic stage, throughout much of the Northern Hemisphere. Epidemiologists call a disease endemic when its presence becomes steady in a particular region, or at least predictable, as with seasonal influenza.1 However, even as case counts and hospitalizations recede, COVID-19 will continue to have broad implications for long-term care in the United States, especially when it comes to costs.
As the country’s aging population continues to grow, the demand for long-term care services and supports increases in kind. In fact, every day until 2030, 10,000 baby boomers will turn 65,2 and 70% are expected to require long-term care services at some point.3 At the same time, the national labor shortage is making it increasingly difficult to hire and retain long-term care professionals, and the competition for qualified candidates is driving higher wages. COVID-19 has also contributed to higher costs through the increased use of personal protective equipment, enhanced safety training, and additional management of regulatory compliance, especially at care facilities. Some of these costs will dissipate over time, while others will continue as part of a best-practices approach to caregiving.
These and other factors driving healthcare costs are addressed in a leading industry survey released in February 2022. According to the annual survey, the cost of long-term care services increased across all provider types last year and increased more substantially for certain settings, such as home health aides and homemaker services. The survey reports the median annual costs for the following long-term care services in the United States in 2021:4
- Home health aide: $61,776
- Homemaker services: $59,488
- Assisted living facility: $54,000
- Semi-private room in nursing home: $94,900
- Private room in a nursing home: $108,405
Over the last five years, the average annual increase for these services has been in the 2% to 6% range. Keep in mind, these are the average costs nationwide. Actual costs can vary greatly by state or region. More importantly, Medicare does not pay for long-term care. That makes it critical to talk to your financial professional about the tools and resources that may be available to help you cover significant costs that Medicare doesn’t, such as long-term care insurance or health savings plans (HSAs). If you have questions about how you will pay for healthcare costs in retirement, contact the office to schedule a time to talk.
4 Genworth Cost of Care Survey, conducted by CareScout®, June through October 2021.
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