March 27, 2006
Assisted living, home care costs climb: study
By Kim Dixon
CHICAGO (Reuters) - Older Americans in need of care face
sharp spikes in the cost of increasingly popular assisted
living quarters and home health aides, according to a study.
The average price tag for a private one-bedroom unit in an
assisted living facility rose 7 percent in 2006 to about
$33,000 per year, compared with a 5 percent rise in 2005,
according to a survey by insurer Genworth Financial Inc..
The average hourly rate for most home health aides climbed
19 percent to $22.15 per hour, compared with a 2 percent rise
in 2005, the study found.
The average cost for a private room in a nursing home, by
contrast, rose 2 percent to about $71,000 in 2006, after rising
6 percent in 2005.
The increased costs reflect the growing popularity of home
health care and assisted living centers, which typically
provide meals, help with everyday tasks and provide some
medical care. Assisted living centers cost less than nursing
homes and attract patients not needing the more greater medical
treatment offered by nursing homes.
"Traditionally, the only option was a nursing home. Now
these home health agencies and assisted living facilities are
much more prevalent," said Buck Stinson, president of
Genworth's long-term care business. "People with a broken hip
or mild cognitive impairment can go to these intermediate
The survey of 9,000 nursing homes, assisted living
facilities and home care providers was conducted in January and
February of 2006.
The assisted living industry is rebounding after struggling
with a spate of bankruptcies in the 1990s, due to overcapacity
and sagging demand.
Living choices facing the elderly will move to the
forefront soon, with nearly 77 million baby boomers heading
into retirement this year.
The majority of patients who use assisted living centers
pay out of their own pockets and through long-term care
insurance. Medicare, the federal health insurance plan for the
elderly, does not provide much support.
Publicly traded assisted living companies include Sunrise
Senior Living Inc., Capital Senior Living Corp. and Brookdale
Senior Living Inc..