The Costs of Home Care versus a Nursing Home

One aspect of health care that is very important to patients and their families is the cost of home care versus the cost of a nursing home or assisted living facility. The John Hancock Life Insurance Company conducted an investigative survey called the Cost of Care Survey to gather data and trends in the long term care (LTC) market. Over 11,000 providers all across the country participated in the survey, including nursing homes, assisted living facilities, adult day care providers, and home health care providers. To track the financial trends, data was collected from 2002 to 2008.

The following results are taken from the November 2008 survey and can also be found at:

http://www.retirementguard.com/files/analytics/National_LongTermCare_Costs_2008.pdf

One statistic that stands out is the average rate of increasing costs of the different types of LTC. The cost of an assisted living facility rose 4.0% over six years; a semi private room in a nursing home rose 2.7%. According to the Consumer Price Index, the general economic inflation rate over this period of time was 3.3%. The cost of home health care aides rose only 1.4%, less than half the rate of inflation.

The study offered national averages for different LTC situations. These rates are as follows:

1. Nursing Home private room: $74,469 annually, $204 daily

2. Nursing Home semi private room: $66,795 annually, $183 daily

3. Assisted Living Facility: $35,544 annually, $2962 monthly

4. Home Health Care: $19 per hour; daily rate varies depending upon need.

One advantage to home health care is the ability to only pay for the time used by the patient, since the rates are usually hourly. In a nursing home or assisted living facility, patients are not given a discount even if their care requirements are minimal. Some patients who use home care can set certain hours for care while having the advantage of living at home.

In addition to national averages, the study provides averages for several U.S. cities, which is important since the cost of living can vary depending upon the region. Examples of the costs include:

1. Los Angeles, CA: $217 per day at a nursing home; $3180 per month at an assisted living facility; $18.46 per hour for home health aide

2. Miami, FL: $248 per day at a nursing home; $2108 per month at an assisted living facility; $15.60 per hour for home health aide

3. Boston, MA: $312 per day at a nursing home; $4290 per month at an assisted living facility; $22.00 per hour for home health aide.

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