If you spent a day in a private room at an average U.S. nursing home in 2010, you would have racked up a bill for $247 - 14% more than you would have paid in 2008, and 47% more than the same level of care cost in 2004. If you stayed for a year, your bill would have amounted to $90,155.
That's according to Prudential's fourth biannual Long-Term Care Cost Study, which tracks cost trends and consumer perceptions surrounding the long-term care category.
In association with adult care specialist LifeCare, the Prudential study evaluated findings based on 1,714 telephone interviews with representatives from nursing homes, assisted living facilities and other providers from 75 metro areas, along with 1,000 online surveys of consumers.
Among key findings:
- Costs for long-term care continue to rise, although the recession has slowed the rate of increase at some facilities. Over the past two years, the increase in the average cost of long-term care services ranged from 2% to 14%, versus increases of 11% to 27% from 2004-2006.
- The largest increase in 2010 was the cost of a private room in a nursing home. The $247 average U.S. daily rate was up 14% from 2008. The most expensive room rate? New York City, at $479.
- Home health care costs rose at an annual compound rate of 13% from 2008 to 2010 to an average daily rate of $190 (assuming an eight-hour day).
- During the same two-year time period, the Consumer Price Index rose at an annual compound rate of just 2.5%, meaning long-term care costs are soaring well ahead of general inflation.
The good news is that most adults are thinking about long-term care. Among adults 35-65, 71% say they're at least somewhat concerned about personally needing long-term care services someday. And most American adults agree they should know more about LTC insurance than they do.
But awareness of the need hasn't yet translated to widespread adoption. Only one in six American adults (17%) has long-term care insurance today, and even among those who consider it "important," only 25% say they own LTC insurance. Obviously, there's considerable room to improve understanding and knowledge of long-term care insurance - and when to buy it. For instance, Prudential's survey found only 8% of adults believe they should purchase long-term care insurance before the age of 50. The survey also underscores that consumers are far more familiar with other types of insurance, such as auto and health.
Building knowledge of LTC insurance starts with understanding the marketplace and where it's going. The 2010 edition of Prudential's Cost of Care study contributes to that understanding by offering new insights into costs trends and other dynamics that are shaping consumer attitudes - and presenting new opportunities for financial advisors.
Click here to request a complimentary copy of Prudential's Long Term Care Cost Study.
