John Hancock Financial announced Wednesday the results of its 2011 cost of care study, which found that long-term care (LTC) costs have continued to increase, but not as much as other goods and services.
The study, conducted by LifePlans Inc., based in Waltham, MA, surveyed more than 11,000 providers, including nursing homes, assisted living facilities, and home health care agencies, in key cities across the country.
Its findings revealed that the national average annual cost of care in the U.S. is $85,775 for a private room in a nursing home; $75,555 for a semi-private room in a nursing home; and $39,240 for an assisted living facility.The average cost of care received at home was approximately $20 per hour.
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To understand how long-term care costs are trending over time, John Hancock calculated a 9-year average based on a comparison of data gathered from providers across the country for John Hancock's 2002, 2005, 2008, and 2011 Cost of Care Surveys. These 9-year average annual increases in the cost of care in various settings, closely track the long-term average annual rate of inflation, which is 4.1%.(1) Specifically:
- The 2011 average cost of a private nursing home room ($235 a day/ $85,775 annually) has risen an average 3.5 percent per year
- The 2011 average cost of a semi-private nursing home room ($207 a day/ $75,555 annually) has risen an average 3.2 percent per year
- The 2011 average cost for a month in an assisted living facility ($3,270 a month/ $39,240 annually) has risen an average 3.4 percent per year
- The 2011 average cost for a home health aide ($20 hourly/$37,440 annually) has risen an average 1.3 percent per year
"The ongoing effect of the recession on the nest eggs of so many individuals underscores the importance of planning for the future," said Marianne Harrison, President of John Hancock LTC. "John Hancock believes that long-term care insurance is an integral component of any prudent financial plan. Our cost of care studies are intended to help people better understand and prepare for their future long-term care needs."
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