That’s according to the latest annual Cost of Care Survey from Richmond, Virginia-based Genworth Financial Inc. (NYSE: GNW), a Fortune 500 insurance holding company. To compile this year’s survey, Genworth contacted nearly 60,000 in-home care agencies, assisted living facilities, adult day health providers and nursing homes.
“[Providers] told us that the same factors responsible for the continuing increase in long-term care costs in recent years — a shortage of workers in the face of increasing demand for care, higher mandated minimum wages, higher recruiting and retention costs, and an increase in the cost of doing business, including regulatory, licensing and employee certification costs — were made even worse by the pandemic,” Gordon Saunders, senior brand marketing manager at Genworth, said in a press release announcing the news.
Overall, the survey found that the cost of homemaker services increased 4.44% to an annual median cost of $53,7681 in 2020. Genworth defines “homemaker services” as assistance with tasks such as cooking, cleaning and running errands.
Meanwhile, the cost for home health aide services increased 4.35% to an annual median cost of $54,912, the survey found. “Home health aide services” includes assistance with activities of daily living (ADLs).
For both categories, the annual median cost is based on 44 hours of care per week for 52 weeks. In other words, those costs are linked to individuals who require mostly full-time home-based care.
Despite challenges and rising costs, home-based care operators have had plenty of tailwinds in 2020. More than ever, the U.S. health care system is recognizing the value that in-home care plays in keeping people healthy and happy — normally at a far lower cost than institutional care.
Additionally, many in-home care agencies have embraced various technologies this year, a fact that could help them become more efficient and lower costs for consumers down the road.
“The pandemic has shined a bright spotlight on the value of home care,” Jeff Huber, CEO of Home Instead Senior Care, said in the release. “We can increase the capacity of the health care delivery system. The hospital of the future looks a lot like your living room. As a part of a value-based care package, we can reduce costs, admissions, readmissions and overall usage of the health care system.”
Omaha, Nebraska-based Home Instead Senior Care is a home care franchise company with more than 1,200 independently owned and operated offices worldwide.
In the senior living space, assisted living facility rates in 2020 increased by 6.15% to an annual national median cost of $51,600 per year, according to Genworth.
The national median cost of a semi-private room in a skilled nursing facility (SNF) rose to $93,075, an increase of 3.24%. The cost of a private room increased 3.57% to $105,850.
Many of the aging services providers Genworth talked to said they were trying to absorb new COVID-19 costs, such as personal protective equipment (PPE), hazard pay and more. But over half predicted they would eventually be forced to raise rates in the next six months.
“Providers have been competing with higher-paying, less-demanding jobs for years, but with COVID-19, they told us it has become much more difficult to recruit and retain care professionals because of factors such as concerns about exposure to COVID-19 and parents needing to stay home with school-age children,” Saunders said.
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