Most people who live long enough need some sort of long term care, and people who reach 65 years of age without a catastrophic health event can usually count on another 20 years of life. So planning or budgeting for the cost of long term care expenses is important.

Over the last year, amid the COVID-19 pandemic, the cost of care rose higher than in previous years, especially when it came to assisted living facilities and in home care. Some of those increases may have been based on increased cost of PPE (personal protective equipment), staff shortages, more regulations and CDC guidelines, and the supply of care providers/facilities falling short of demand.

It’s estimated that 70% of people over 65 will need some type of assistance with the loss of independence due to age, mental, or physical health changes. Generally, Medicare and typical health insurance coverage does not cover long term care, although Medicaid may provide assistance for low income Americans.

Each year for the past 17 years, Genworth has conducted a cost of care survey to get a nationwide perspective on the cost of long term care expenses throughout most metropolitan areas in the United States.  The latest survey was released December 20, 2020. It showed that the cost of assisted living care rose 6.15% over 2019 rates while the cost of in home care rose 4.44%.   Nationally, the median monthly rate for assisted living was $4300, and the hourly rate for in home care was $23.50.

California, a high cost of living state with many more employer mandates and higher worker’s compensation and payroll costs, has much higher long term care expenses than the national average.  The Genworth report on California reveals the state currently has a median hourly rate of over $31 hourly for in home care. The monthly cost of assisted living in California is $5,000; $700 more than the national monthly cost.

The cost of nursing home care, which includes more medical care than assisted living, has risen by just over 3% since 2019. In California, a semi-private room costs $9,247 on average per month, while a private room costs $11,437 per month, according to the Genworth survey. Most families don’t realize that Medicare only covers a portion of nursing home expense, with 88% of the cost generally falling onto the patient and their family.

Given that seven out of ten people over age 65 need long term care, and that many have not budgeted or planned for that care, it’s common for older Americans to end up depending on family as caregivers. 

For those who hire professional in home care, Genworth reports that 61% of families pay for that care out of retirement accounts and personal savings, and those families must be careful to avoid paying caregivers illegally.  Other families may rely on filing a long term care claim if they purchased long term care insurance or other benefit programs.  

To read Genworth’s report on San Diego Long Term Care Costs click here

To read Genworth’s report on Los Angeles Long Term Care Costs click here