Comparing the Cost of Home Care, Assisted Living, and Adult Day

| May 31, 2016

Consumers are paying more for long-term services and supports (LTSS) than they did last year, according to a released recently by Genworth.

Consumers are paying more for long-term services and supports (LTSS) than they did last year, according to a 2016 Cost of Care Survey released recently by Genworth.

“The cost of receiving care continues to rise sharply year over year, especially for services in the home, where the vast majority of Americans receive long-term care and for a longer period of time,” says the Genworth report.

The only exception to this trend was found in adult day services, where costs have decreased by 1.3% since 2015.

Highs and Lows


The Genworth study is based on responses to more than 15,000 surveys submitted by nursing homes, assisted living communities, adult day health settings, and home care providers.

Among these respondents, assisted living providers reported the lowest annual cost increases since 2015. Year-over-year costs in this sector grew by only .8%. Five-year growth rates were not as positive for assisted living, however. The median annual cost for care in an assisted living community -- $43,539 -- represents an average increase of 2% over the past 5 years.

Five-year growth in nursing home rates was also significant: a 3.5% growth in rates for private rooms, and a 3.1% increase in rates for semi-private rooms.

The cost of homemaker services -- which deliver help with household tasks that cannot be managed alone -- increased by 2.6% since 2015. This was the highest increase recorded by Genworth across all settings since 2015. The cost of homemaker services rose by a slightly lower rate -- 2.1% -- over 5 years.

Rising home care costs represent a new phenomenon, according to Senior Housing News. Between 2005 and 2010, the cost of services in the home increased at an annual rate of only 1.7%, compared with 6.7% for assisted living settings during that time.

“You find that home care costs are rising much faster than some of the other settings,” Deb Mitra, senior vice president of business strategy at Genworth, told Senior Housing News. “That’s probably reflective of the fact that that’s a setting in which people like to receive care. That’s also a setting where it’s becoming (harder) to find caregivers, (so) wages are going up. That’s driving up the cost of home care.”

Costs Across Sectors

  • Homemaker and Home Health Aide Services: The median monthly cost for homemaker services is $3,813 a month ($45,760 per year), according to the study. The cost of home health aide services – which feature hands-on personal care – grew by 1.3% over the past 5 years. The median monthly cost for home health aide services is $3,861 a month ($46,332 per year).
  • Nursing Homes: The monthly cost of a private nursing home room is $7,698, up by 1.2% from 2015. The cost of a semi-private room rose by 2.3% since 2015 to $6,844 per month, according to Genworth data. The cost of care varied widely from market to market, however. In Anchorage, Alaska, for example, the median cost of a private room in a nursing home is $303,680 per year, reports LifeHealthPro.
  • Assisted Living: On average, the monthly cost of assisted living is $3,628 per month. But costs can vary substantially by location. Senior Housing News reports that the annual cost of assisted living has risen by 9% in Washington, DC, over the past 5 years. Consumers in the nation’s capital pay, on average, $80,400 per year for assisted living. North Dakota and Vermont experienced a 6% increase in assisted living costs over the same period.
  • Adult Day Services: The current adult day rate of $68 per day ($17,680 per year) represented a decrease of 1.3% since 2015. Peter Notarstefano, director of home & community-based services at LeadingAge, says that the decrease in costs for adult day services was probably due to an increase in managed care and acuity-based payments. “We found this trend when we researched our report on Adult Day Services Medicaid Reimbursement,” he said.

Implications of Rising Costs


Rising costs are particularly noteworthy, given the fact that at least 70% of Americans over age 65 will need some kind of LTSS during their lifetime, said Tom McInerney, president and chief executive officer at Genworth, in a statement.

In addition, a complementary online caregiving survey from Genworth found that 4 out of 5 adults underestimate LTSS costs and, therefore, may not plan adequately for the financial burden they will carry when they need those services. Nearly one-third of Americans (30%) incorrectly believe that in-home services will cost them less than $417 per month.

People who stand to be affected most by LTSS costs are most likely to underestimate the cost of care, reports Genworth. These individuals include:

  • Women, who are statistically more likely to enter caregiving roles.
  • Single adults, who may not have a partner to rely on for caregiving needs.
  • Younger adults, who are more likely to deal with the reality of a parent needing care.


"The data from our complementary study dramatically demonstrated the huge disparity between what consumers think costs are and what they actually are, which is why it's so important for families to educate themselves about the costs and plan ahead for how they will pay for those costs before it's too late," said McInerney.