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States Where Elder Care Is Sky High

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.


10. New Jersey
> Median private nursing home cost: $114,975 (tied for 6th highest)
> Median assisted living facility cost: $68,556 (the highest)
> Life expectancy: 79.7 (tied for 14th highest)
> Median elder income: $20,000 (5th highest)

Depending on the type of assistance provided, New Jersey’s long-term care varies in cost. According to Genworth’s survey, the estimated costs of homemaker services are average. Hands-off care, which includes helping with cooking and cleaning, is 22nd highest in the country, and hands-on care, which includes bathing, dressing and cooking by a professional service, is the 23rd-most expensive. However, assistance for the elderly outside of the home is much more pricey in the state. The annual median costs for a semiprivate nursing home is $106,489, and private nursing homes cost a median $114,975 — both are the sixth-highest costs for their category.

9. Rhode Island
> Median private nursing home cost: $114,975 (tied for 6th highest)
> Median assisted living facility cost: $46,770 (11th highest)
> Life expectancy: 79.3 (18th highest)
> Median elder income: $17,200 (25th lowest)

In Rhode Island, 2.5% of residents are 85 and older. While this may not seem like much, it is the highest proportion in the country, tied with three other states. According to Wider Opportunities for Women’s Elder Index, senior citizens earn a median income of $17,200 each year, which is 25th lowest in the country. The costs of living, however, are among the highest in the U.S. This disparity extends to long-term care. Median nursing homes costs are $114,975 each year. These costs have gone up by more than 5% in the past year.

8. Connecticut
> Median private nursing home cost: $145,817 (2nd highest)
> Median assisted living facility cost: $53,700 (6th highest)
> Life expectancy: 80.2 (5th highest)
> Median elder income: $19,580 (7th highest)

Connecticut is one of the wealthiest states in the U.S. The median income for the elderly is estimated at $19,580 per year, the seventh-highest in the U.S. The costs for long-term care are just as high, however. This is especially the case for nursing homes. Senior citizens at a semiprivate facility can spend up to $178,850 each year. At a private nursing home, year-round expenses can amount to nearly $190,000 per year.

7. New Hampshire
> Median private nursing home cost: $105,120 (tied for 8th highest)
> Median assisted living facility cost: $48,000 (9th highest)
> Life expectancy: 79.7 (tied for 14th highest)
> Median elder income: $18,500 (16th highest)

While New Hampshire has among the highest long-term care costs in the country, the good news is that they are not increasing as much as they are in the rest of the country. The median price of a private nursing home in the state went up just 0.75% per year over the past five years, the smallest increase in the country. Meanwhile, home health aide services did not go up at all.

6. Vermont
> Median private nursing home cost: $101,506 (10th highest)
> Median assisted living facility cost: $46,800 (10th highest)
> Life expectancy: 79.7 (tied for 14th highest)
> Median elder income: $17,300 (25th highest)

Vermont has a large elderly population. Median age in the state is 41.5 years, the second-oldest in the U.S. Also, 14.6% of the population is 65 or older, the seventh-largest percentage in the U.S. According to WOW, median income for an elderly resident is just $17,300, the 25th highest in the country. Long-term care costs each year can vastly exceed that. Annual median costs for treatment at an adult day health care come to $34,190, the most expensive of any state.

5. Delaware
> Median private nursing home cost: $96,725 (13th highest)
> Median assisted living facility cost: $63,228 (3rd highest)
> Life expectancy: 78.3 (22nd lowest)
> Median elder income: $18,500 (17th highest)

The costs of staying at an assisted living facility in the state have shot up at an annual rate of 9.51% over the past five years. The median cost in 2012 was $63,228, the third-highest cost of any state. The lowest cost reported for an assisted living facility was just shy of $40,000, well more than the median price tag for most states.

4. Maine
> Median private nursing home cost: $105,120 (tied for 8th highest)
> Median assisted living facility cost: $54,000 (5th highest)
> Life expectancy: 78.7 (24th highest)
> Median elder income: $15,500 (9th lowest)

The median age in Maine is 42.7 years, the oldest in the U.S. A full 15.9% of the state’s population is 65 or older. The state is in the top 15 for all six types of long-term care and is fifth-highest for assisted living facilities. The median cost of staying at an assisted living facility is among the highest in the U.S., at $54,000 per year. Partially because of its sparse population, transportation costs are among the highest in the country.

3. Hawaii
> Median private nursing home cost: $125,925 (4th highest)
> Median assisted living facility cost: $45,000 (13th highest)
> Life expectancy: 81.5 (the highest)
> Median elder income: $20,700 (3rd highest)

Residents of Hawaii have the longest life expectancy in the U.S. at 81.5 years. Costs in the state are among the highest in the U.S, especially the costs of housing, causing Hawaii to be among the most expensive for all types of long-term care. The most expensive areas of assistance are private and semiprivate nursing homes. Prices of long-term care have also shot up in the past few years more than in most parts of the country. The median annual cost of an assisted living facility in the state has shot up at a compound annual growth rate of 13.5% per year over the past five years.

2. Massachusetts
> Median private nursing home cost: $127,750 (3rd highest)
> Median assisted living facility cost: $55,050 (4th highest)
> Life expectancy: 80.1 (6th highest)
> Median elder income: $16,800 (20th lowest)

According to the report, Massachusetts has the biggest annual expenses of any state in the contiguous U.S. It is in the top five most expensive median costs for long-term care in five of the six categories. Homemaker services cost a median of $51,480, and the survey reports a maximum price of up to $71,500 each year. According to study representative Jowynna Michaels, the state’s costs for housing and wages are among the highest in the country, affecting the costs of all six types of care.

1. Alaska
> Median private nursing home cost: $232,505 (the highest)
> Median assisted living facility cost: $66,000 (2nd highest)
> Life expectancy: 78.3 (23rd lowest)
> Median elder income: $23,100 (the highest)

Not only is Alaska far and away the most expensive state for the elderly to receive long-term care, it surpasses the rest of the country by a very wide margin. Costs for each of the six categories are in the top three, including the third-highest median prices for both home health aide and adult day health care services. The care that separates Alaska from other states is the live-in facilities for the elderly. The median annual price for a semiprivate nursing home stay is $273,750. This is $138,700 more than the median cost in Connecticut, the second-most expensive in this category.

Michael B. Sauter

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