Many people require some form of long-term care during their golden years. Due to factors like surging demand and worker shortages, long-term care costs are ballooning and becoming harder for seniors to afford. CBS News reports that post-pandemic, long-term care costs have increased by an average of 10% to 20% per year. Here are 9 reasons why both nursing and in-home care have become so expensive.
1. Shortage Of Care Workers
According to Forbes, it can be hard to find aides willing to perform care work. These worker shortages have caused wages to increase, contributing to the rising cost of both in-home and nursing home care.
2. Long-Term Care Insurance Premiums
Many seniors purchase insurance to help defray the cost of skilled nursing care. But long-term care insurance premiums have been increasing due to rising healthcare costs and longer life expectancies, which may make policies harder to afford. Insurers adjust premiums to cover the projected costs of providing long-term care benefits, ultimately passing these expenses on to policyholders.
Policyholders who are shocked by these increases may opt to lower their inflation protection to reduce their premiums. However, this might be unwise considering how much long-term care costs are ballooning.
3. Inflation
Inflation caused the price of many goods and services to rise, and nursing home care is no different. One reason long-term care costs are ballooning is because skilled care facilities have higher overhead now. Wages and the costs of food and medical supplies have all gone up, causing many nursing homes to raise their prices to cover growing expenses.
4. Regulatory Compliance
Experts say that tougher nursing home regulations can also help explain why long-term care costs are ballooning. Compliance with stringent regulations and licensing requirements adds operational costs to facilities. Investments in infrastructure, staff training, and maintaining quality standards contribute to escalating expenses and overhead, which often get passed on to patients.
5. Rising Demand
An aging population has caused a surge in demand for long-term care facilities. With longer life expectancies, more individuals require assistance with daily activities, driving up the need for care services.
6. Potential Gaps In Medicaid
Potential gaps in Medicaid coverage may make it difficult for low-income families to access affordable care. According to the New York Times, it can be difficult for seniors to qualify for an in-home care waiver due to the limited number available.
Getting a nursing home slot can also be a challenge due to barriers like a lack of nursing home beds and confusing state rules. Seniors may fall through the cracks of the current system and rely on loved ones to cover care gaps, increasing the financial burden on families.
7. Construction And Facility Costs
Building and maintaining long-term care facilities requires significant investments in real estate, infrastructure, and upkeep. These operational expenses contribute to the overall cost of providing long-term care services, especially considering how much construction costs have increased in recent years.
8. Complex Patient Needs
Research suggests that complicated health needs are becoming more common. Many individuals entering long-term care facilities may have multiple health conditions that require specialized accommodations or increased medical attention, such as round-the-clock care.
For example, dementia patients often need secured units to prevent wandering behaviors. Treating complex conditions and overlapping comorbidities increases the overall expense of long-term care services, adding to labor, facility, and other costs.
9. Technological Advancements
While medical technology enhances the quality of care provided in long-term care settings, it can also come with a hefty price tag. Adopting advanced digital health solutions may drive up the overall expense of care due to training and implementation costs.
Preparing For Long-Term Care Costs
Due to the rising price tag of nursing and in-home care, it’s essential to prepare for this expense far in advance. Consider increasing the amount of money you save and invest every month to build a bigger nest egg, especially if you’re approaching retirement age.
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Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.