Survey finds long-term care costs outpacing inflation

The price tag for nursing homes, in-home care and assisted living kept growing in 2009, potentially adding another hardship to retirees already hurt by financial losses amid the recession.

A new study found that the cost of long-term care in Virginia is rising at a rate outpacing inflation.

The survey, by Henrico County-based insurer Genworth Financial Inc., said that except for home-based health care, the costs of long-term care also are poised for steady increases.

The cost of labor is a key factor driving the price of care at facilities, though that has abated somewhat because of the availability of workers as unemployment has risen and because of higher retention rates.

"The labor required in a facility is generally more skilled in nature," said Beth Ludden, senior vice president of long-term care product development at Genworth.

Nationally, the average annual cost for a private room in a nursing home is $74,208, or $208 per day, a 4.7 percent increase over the past year and 4.3 percent more annually over the past five years.

In Richmond and Roanoke, the cost for a private room has risen 8 percent a year since 2005 and 5 percent a year in the Norfolk-Virginia Beach region.

The median annual cost for a private nursing home room in Richmond is $78,658.

In Richmond, costs for a private room in an assisted-living facility rose even faster, increasing 16 percent a year over the past five years to a median annual cost of $37,752.

Nationally, the cost for a one-bedroom unit in an assisted-living facility is $33,903 annually, or $2,825 monthly, marking an increase of 1.4 percent over 2008 and 4.7 percent annually over the past five years.

North Dakota has the lowest annual costs at $25,049, with Massachusetts the highest in the continental U.S., at $55,137. Again, the Northeast led the nation in costs.

The recession highlights the expense of long-term care, Ludden said, with many people having counted on assets such as their homes to help pay for the costs. Many of those assets are now worth less for many people.

"Historically people have thought they would have an asset to liquidate to pay for it, but those assets may now be devalued," she said.

A bright spot in the company's survey is the relatively flat cost of in-home care. The hourly cost for in-home care for non-Medicare-certified workers rose a half-percent to $18.50 from a year ago and increased 1.7 percent annually over the past five years.

In Richmond, however, the median rate is $19, which represents an annual growth rate of 5 percent since 2005. The cost ranges from $15 to $21 in Virginia.

Louisiana was the least expensive annually while Massachusetts topped the list.

Staff writer John Reid Blackwell contributed to this report.