Nursing Home Costs Soar In 2024

Are you worried about the rising costs of nursing homes? You’re not alone. This year, families and caregivers are seeing a significant increase in the expenses associated with senior care. In fact, for some states, the cost of nursing home care has seen a 7% or even a whopping 10% increase in costs over the past 5 years. With the cost of care surging, I think the obvious question on everyone’s mind is, “Why?”

First, the aging population is growing. You’ve likely heard the statistic that by 2034, over 77 million people in the US will be age 65 or older (that’s over 20% of the population!) So, it’s probably no surprise that the trend of older adults needing care is rising as well.

Second, healthcare labor shortages. Despite consistent growth over the last couple of years, staffing at nursing homes and other residential care facilities is still down by 4.6% compared to pre-pandemic employment numbers. And, as the US population continues to age, experts say it’s probably going to get worse. According to the Health Resources & Services Administration (HRSA), a government agency focused on improving access to healthcare for underserved communities, professions like LPNs and RNs are predicted to grow in demand faster than new workers can enter the respective fields over the next 12 years. Here’s what the HRSA is projecting:

• Nationally, the supply of LPNs in 2036 is projected to cover only 88% of the demand.
• A 9-10% shortage of RNs is predicted between 2026 and 2036.

Unless you were sick on the day they taught “supply and demand” in your Social Studies class, you can probably guess what I’m about to say next.

An aging population means high demand for healthcare workers in places like hospitals, assisted living facilities, nursing homes, and skilled nursing facilities. If the supply of healthcare workers continues to stay lower than the demand, then you can expect that to impact wages and the cost of care.

Lastly, it’s very likely that regulatory changes and improvements in care standards have added to the operational expenses of many nursing homes. Facilities are investing more in technology and training to meet these new requirements, which is going to contribute to cost increases.

Other Factors That Influence Senior Living and Senior Care Costs

Apart from the above reasons for the price surge, several other factors can influence the cost of nursing homes and other senior living arrangements.

Location

Urban areas tend to have higher costs compared to rural regions because of higher living expenses and wages in larger cities.

Facility Amenities

Nursing homes with state-of-the-art facilities, private rooms, and specialized care programs will charge more.

Level of Care Needed

Residents who need intensive medical care or specialized services, such as memory care for Alzheimer’s patients, will usually face higher expenses.

Nursing Home Regional Cost Variations in 2024

Costs can vary widely depending on the state you live in. Here’s a quick look at some monthly averages:

High-Cost States

• Alaska: Semi-Private Room $18,706, Private Room $34,584
• Oregon: Semi-Private Room $14,585, Private Room $15,208
• California: Semi-Private Room $11,406, Private Room $13,231

Mid-Range States

• Michigan: Semi-Private Room $10,570, Private Room $11,467
• Colorado: Semi-Private Room $9,475, Private Room $10,433
• Florida: Semi-Private Room $9,885, Private Room $11,406

Lower-Cost States

• Texas: Semi-Private Room $5,323, Private Room $6,692
• Oklahoma: Semi-Private Room $5,931, Private Room $6,844
• Missouri: Semi-Private Room $5,931, Private Room $6,540

All state monthly averages can be found below.

Cost of Care Impacts

So, what does this all mean for you and your loved ones? While the rising costs of nursing homes are a challenge, it’s important to remember that many of the contributing factors are ultimately positive. A growing aging population means people are living longer, healthcare is improving, and there’s a focus on providing the best possible care. The challenge lies in finding solutions to address the worker shortages and ensure these care improvements remain sustainable.

How to Pay for Nursing Home Care

Paying for nursing home care can be challenging, but there are several options available to help manage the costs.

Long-Term Care Insurance

Long-term care encompasses a wide range of services that go beyond what standard health insurance typically covers. This may involve support with everyday activities like bathing, dressing, or mobility assistance. With long-term care insurance, you can offset the expenses of these types of care whether it’s at home, in a nursing home, or in an assisted living facility. If you or a loved one has a long-term care insurance policy, make sure you understand the specifics of what it covers.

Medicaid and Medicare

Medicaid can cover nursing home costs for those with limited income and assets. While Medicare doesn’t cover long-term care, it can pay for short-term stays following hospitalization.

Personal Savings

Who says you have to resort to taking out a loan or liquidating assets to cover long-term care costs? If you already have personal savings or a well-thought-out retirement plan, you might have the financial resources you need. To proactively prepare, consider consulting your financial advisor or seeking expert guidance to optimize your investments for the possibility of future care needs.

Average Monthly Nursing Home Care Cost by State

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