The majority of Americans who need long-term care services receive that care at home. But the costs of home-based care services will likely rise again this year with new Department of Labor overtime rules President Barack Obama signed into law earlier this month.
“That will impact costs, for sure,” Beth Ludden, senior vice president of Genworth Financial, told InsuranceNewsNet.
The new overtime rules will have an impact on many workers in industries such as home health care. Under the new overtime rules, anyone making a salary of less than $47,476 will qualify automatically for overtime pay when they work more than 40 hours a week. This salary threshold is about double the current $23,660 threshold.
Under the new threshold, about 35 percent of salaried workers automatically will become eligible for overtime pay, the DOL said.
Proponents said the changes would help middle-class workers, but many businesses have opposed the rule because it raises labor costs. The changes go into effect on Dec. 1.
Home health care traditionally was provided by small independent agencies. Now larger companies built around the nonmedical-care model, such as Home Instead Senior Care, are beginning to move into different markets.
Nationally, the median monthly costs for the services of a homemaker or an in-home health aide for 44 hours a week are $3,813 and $3,861, respectively. That's according to the 13th annual Genworth Financial 2016 Cost of Care Study which covers 43,000 long-term care providers in 440 regions.
Nearly one-third of Americans believe that costs for home care services run less than $417 per month, the survey also found.
How Much Does It Really Cost?
The Genworth study compares the cost of long-term care across several categories on a state-by-state basis.
Homemaker costs - or costs for services with household tasks such as cooking, cleaning and running errands - are up 2.56 percent from 2015, Genworth said. Costs of home care aide services, a more hands-on level of service that excludes medical care, rose 1.25 percent since 2015.
Over the past five years, homemaker costs have risen 11.1 percent while the cost of a home health aide has climbed 6.6 percent.
The monthly cost of a private nursing home room is $7,698, up 1.24 percent from 2015, the Genworth survey found.
The cost of a semi-private room is up 2.27 percent to $6,844 per month. Assisted living communities saw a slight increase in costs of 0.8 percent to $3,628 per month, the survey also found.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected]
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