Long-term care for seniors is of increasing concern in the United States as baby boomers begin to retire. Genworth (NYSE: GNW), a leading provider of long-term health insurance, has released its ninth annual report on the cost of care for the elderly. The report, which looked at the six types of long-term care for the elderly, found that while the price of some types of care have remained flat over the past few years, others have increased at an alarming rate.
Genworth’s Cost of Care Survey examined the costs of nursing homes, in-home care, assisted living facilities, and adult day health care centers in each state. In some states, the median reported annual costs of care of costs vastly exceeds those in others. These costs also are often completely unaffordable, given the incomes of the elderly in those states. 24/7 Wall St. examined the 10 states with the highest long-term health care costs for the elderly.
24/7 Wall St.’s examination of labor and housing markets identifies several factors that can impact the costs of caring for the elderly. According to Jowynna Michaels, care resources operations leader for Genworth’s caregiving division, states with expensive in-home care tend to have higher wage costs. States with expensive nursing homes and assisted living facilities usually have higher home prices.
While there are some differences, all of the states with the highest costs of long-term care for the elderly have the highest overall consumer prices in the U.S. According to Michaels, these prices are generally fueled by particularly high incomes. The majority of the states with the highest long-term care costs have among the highest income for the elderly. Four are in the top 10. Alaska, which has the highest long-term costs, has the highest elder income in the U.S.
Even though seniors in these states are for the most part the wealthiest in the country, the costs of even mid-level long-term care are much higher than their estimated incomes. A separate study by Wider Opportunities for Women reported median elder income by state. In some of these states, elder income is far below the costs of care. For example, according to WOW, the median income for an elderly resident of Massachusetts is $16,800. According to Genworth, the median cost for an assisted living facility in the state is $55,050.
Another important factor that drives up costs in these states is the availability of services. According to Michaels, in states like Florida, which has a substantial support network for the elderly, “it is easier to staff appropriately, and that can keep costs down.” In states like Alaska and Hawaii, however, where people are coming from a 100-mile radius, “you have to pay more transportation costs, you have to keep more people on staff so you provide the types of services people need immediately,” Michaels said.
Genworth’s 2012 Cost of Care Survey identified the minimum, median, and highest price of the six types of long-term care by state. In order to identify the most expensive states for all types of long-term care, 24/7 Wall St. weighed the median annual costs for each of the six types evenly.
These are the 10 states where elder care is outrageous.