On October 26, 2010, the MetLife Mature Market Institute released the results of its annual Market Survey of Long-Term Care Costs, which reveal an alarming trend: the cost of long-term care, in particular nursing homes and assisted living, are outpacing inflation. Both nursing home costs and assisted living costs rose significantly from 2009 to 2010; nursing home costs are up 4.6%, while assisted living costs are up 5.2%. Inflation has been trending between one and two percent since May, according to NJ.com.
Between 2008 and 2009, long-term care costs rose by 3.3%, making the total two-year increase between 7.9% and 8.5%. Sandra Timmerman, director of the MetLife Mature Market Institute, notes that these sharp increases even exceed that of medical care inflation, which is currently around three percent.
In contrast, costs for adult day care services and home health aides remained flat. Adult day care is the fastest growing senior care segment, with more than 4,600 adult day centers nationwide. The number of adult day care centers has increased by 35 percent since 2002.
Today’s senior population, and the aging Baby Boomers, who begin to turn 65 this year, are concerned about their ability to afford long-term care. With costs rising at more than twice the rate of inflation, it’s unlikely that salary increases, retirement savings, and cost of living increases for social security and other fixed incomes (which were $0 this year) will be able to keep up, leaving many to wonder how they’ll meet their own — and loved ones’ — needs as they age. If the rising cost trend continues, solutions like long-term care insurance will become more essential than ever for the aging population.
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