LTC Bullet: LTC Costs Up, Up, and Away

Wednesday, November 4, 2009


LTC Comment: Housing costs in general are down but LTC housing costs are way up. What gives? After the ***news.***

*** CLASS COVERAGE BY CLTCR. Here's what the Corporation for Long-Term Care Certification had to say in its latest "CLTC Newsletter." "CLASS Consciousness:

You won’t know whether to laugh or cry when you read this colorful commentary by Steve Moses, President of the Center for Long Term Care Reform, about attending a CLASS act briefing in Washington. It’s a compelling account of myopic views that can lead to poor public policy-making. This piece, taken from one of Steve’s LTC Bullets, appeared in McKnight’s Long Term Care News on October 23.

Read "Problems with the CLASS Act" by clicking here." ***

*** HORSE'S MOUTH. Want to get the Center's important messages daily right from the source? We email "LTC Bullets" or "LTC E-Alerts" every work day to the best and the brightest in the field of long-term care. Top agents receive our e-pistles but so do the media, legislators, public officials, and financial advisors of all kinds. Want to join this LTC elite? Contact Damon at 206-283-7036 or Or join online here. The cost is nominal ($150 per year or $12.50 per month) but your individual and corporate memberships make the Center's public policy research and advocacy possible. Please become part of our solution. ***

*** WHY JOIN? Here's another reason supplied yesterday by a long-time Center member and supporter who is a successful LTCI specialist: "I truly enjoy the access to the Members-Only Zone, and the archives of LTC information that is available. What a great virtual library of information. With all the Health Care Reform activities going on, it is critical that we have timely, and accurate information available. The Center is my main source and your efforts make it easily accessible. Thanks again, and oh yes, the check is in the mail." Randy Gallas, CLTC, LTCP, Certified Long-Term Care Specialist, Kettering, OH. ***



LTC Comment: U.S. housing prices are down 30 percent from their May 2006 high, but MetLife reports that LTC costs, of which housing is a large part, are up 3.3 percent. How come? So what?

How come? The reason is obvious. Demand for LTC is growing and supply is limited. Why is supply limited? Chalk it up to government interference in the LTC marketplace. Medicaid made nursing home care free in 1965, thus crowding out a market for privately financed home and community based care and impeding the market for private long-term care insurance to pay for all levels of care. LTC charges to private payers at all levels of care have to be higher to make up for dismally low Medicaid reimbursements that are unlikely to increase any time soon. In fact, Medicare and VA expenditures for LTC are also likely to decline, putting even more upward pressure on private pay rates.

So what? When it comes to long-term care risk and cost, consumers had better look through the windshield at what's coming and not through the rear-view mirror. The government safety net for LTC, as undesirable as it's been, is disappearing fast and won't be there at all for the middle class and affluent people within a decade. Smart consumers will see the future of LTC financing, not for what it's been, but for what it will become: a frayed safety net for the truly destitute, but mostly private pay--first from savings, then from home equity. The only way to get ready for what's coming is to save, invest and insure privately for the growing future risk and cost of long-term care.

Following is the MetLife Mature Market Institute's press release on its 2009 survey of LTC costs. Find the report itself here. As always, you can find a link to this survey and past LTC cost surveys for comparison, in "The Zone," the Center for Long-Term Care Reform's password-protected website for members. Not a member? Join now. Contact Damon at 206-283-7036 or Or join online here.



Westport, CT - October 27, 2009 - Price rollbacks throughout the U.S. economy during the past year did not apply to long-term care service providers, according to the 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs. Private room nursing home rates rose 3.3% to $219 per day or $79,935 per year, while assisted living also rose 3.3% on average to $3,131 per month. Home health care aides now cost an average of $21 per hour, a 5% increase; adult day services run $67 per day, a 4.7% increase.

For nursing homes, the highest costs for a private room were reported in Alaska ($584/ day) while the lowest were in Louisiana, Rest of State ($132/day). Assisted Living costs were highest in Wilmington, Delaware ($5,219/month) and lowest in North Dakota ($2,041/month). The highest Home Health Care Aide rates were $30 per hour in the Rochester, Minnesota area, while the lowest were reported in the Shreveport, Louisiana area at $13 per hour. Adult Day Services were highest in Vermont at $150 per day and lowest in Montgomery, Alabama at $27 per day.

The study, which groups Assisted Living Communities into three categories- "basic" (five or fewer services), "standard" (six to nine services) and "inclusive" (10 or more services)- notes differences from 2008 in the number of communities in each category. More are classified in the middle "standard" range and fewer in the "basic" category. Communities in the "standard" category include more services in their base rates, but, on average, also have higher base rates. The study also found that those who enter an Assisted Living Community with Alzheimer's disease, or those who develop Alzheimer's later, can expect to pay more for that care, with an average monthly cost of $4,435.

"These across-the-board increases may be surprising to many given the economy over the past year," said Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute. "But, while the Consumer Price Index (CPI) decreased overall during the past year, costs for medical care are 3.3% higher, which parallels our findings on long-term care. The change in pricing methods at some assisted living communities may be another factor, a warning to consumers to carefully compare prices at all long-term care service facilities by considering both the base price and the add-ins for additional services."

Additional Long-Term Care Facts

About three-quarters (73%) of the home health care agencies surveyed provide Alzheimer's training to their employees, and almost all (98%) agencies surveyed do not charge an additional fee for patients with Alzheimer's. About one-quarter (27%) of the home health care agencies surveyed have a 24-hour or live-in rate. The average capacity at adult day service centers is 44. The average client-to-staff ratio is 6:1 with a maximum of 20:1.


This survey of nursing homes, assisted living communities, home care agencies, and adult day services in all 50 states and the District of Columbia, including national figures and data from 87 individual markets across the country, was conducted by telephone between July and October 2009 for the MetLife Mature Market Institute by LifePlans, Inc. For nursing homes, private-pay rates for long-term (custodial) nursing care were obtained for private and semi-private rooms throughout the U.S. At assisted living communities, costs were obtained for room and board (at least two meals per day, housekeeping and personal care) in one-bedroom apartments or private rooms with private baths. Home care rates were based on hourly rates for home health aides at licensed agencies and agency-provided homemaker/companion services. Adult day service costs reflect daily rates at licensed facilities for the majority, though licensing requirements vary by state.

LifePlans, Inc.

LifePlans, Inc., a risk management and consulting firm, provides data analysis and information to the long-term care insurance industry. The firm works with insurers, the federal government, industry groups, and other organizations to conduct research that helps these groups monitor their business, understand industry trends, perform effective advocacy, and modify their strategic direction.

The MetLife Mature Market Institute®

Established in 1997, the Mature Market Institute (MMI) is MetLife's research organization and a recognized thought leader on the multi-dimensional and multi-generational issues of aging and longevity. MMI's groundbreaking research, gerontology expertise, national partnerships, and educational materials work to expand the knowledge and choices for those in, approaching, or caring for those in the mature market.

MMI supports MetLife's long-standing commitment to identifying emerging issues and innovative solutions for the challenges of life. MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates, is a leading provider of insurance, employee benefits and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. For more information about the MetLife Mature Market Institute, please visit:

The 2009 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs can be downloaded from under "What's New." It can also be ordered by e-mailing,, or by writing to: MetLife Mature Market Institute, 57 Greens Farms Road, Westport, CT 06880.