For seniors choosing between hiring a home health aide and entering assisted living, cost may not be much of a differentiator, newly released data suggest. The information reveals price tags for assisted living are comparable to those for in-home aides — and for both types of care, costs can vary significantly depending on location.
A Place for Mom (APFM), the nation’s largest senior care referral service, on Wednesday released its first National Senior Living Price Index, a new resource that reveals cost trends in senior housing and care throughout the U.S., primarily across independent, assisted living and memory care.
Developed in partnership with Dr. Matthew Harris, assistant professor of economics at the University of Tennessee, the Index tracks transactional data collected by APFM between consumers and senior living communities across the U.S. from 2011-2014, organizing it across four primary regions.
In total, the Index represents a sample of APFM’s overall referrals for families, focusing on monthly fee data collected for more than 10,000 senior living communities (IL, AL and MC), including 80,000 move-ins for seniors from January 1, 2011 through December 31, 2014.
“Our pricing index is unique in that it reflects transaction prices based on actual move-in rent and care data from our work with over one million families,” said Sean Kell, CEO of APFM, in a written statement.
The data aims to not only help seniors and their families prepare financially for the various costs of senior living, Kell added, but also shed some light on trends impacting the market for operators, developers and other professionals working in the sector.
On average, the national monthly fee for independent living was $2,520 in 2014, according to the National Senior Living Price Index. For assisted living, the average monthly rent was $3,823 and for memory care, the average national monthly spend was $4,849.
This puts the average yearly cost for assisted living at nearly $46,000. This is only slightly more expensive than the annual median cost of a home health aide, which was about $45,000 in 2014, according to data from long-term care insurance company Genworth.
Naturally, the average rate for independent living was cheaper than those of assisted living and memory care, since the housing type does not typically include medical or nursing care as part of its monthly fees.
Many more factors, however, went into APFM’s calculations than just simply the monthly rent. Things like unit sizes, floor plans, room amenities as well as additional fees for pets, parking and services offered by the community were also taken into consideration.
On the care services side, other influencing factors on price included medical conditions and the required level of medication management/administration, as well as the mobility of residents and their needs for assistance with activities of daily living.
The biggest influencers on senior living costs related largely to geography, with some regions requiring a higher monthly spend than others for the various types of senior care.
The Northeast played home to the highest average costs across all three property types, according to the Index. On average, the monthly fees for independent living in the region were $2,765 last year, $4,315 for assisted living and $5,779 for memory care.
“The price of senior care in the Northeast is 10-20% more expensive than the other regions of the United States,” said APFM in a release on the Index’s findings. “Of the three segments analyzed, memory care exhibits the largest differential in price between the Northeast and other regions. The cost of living in the Northeast is also the highest of the four census regions.”
Again, this tracks largely with home health data compiled by Genworth and other organizations. Northeastern states including Massachusetts, New Hampshire, Rhode Island, Vermont and Delaware rank among the priciest for home care aides.
When it comes to growth among the regions, costs for memory care and assisted living are growing fastest in the West and the Midwest, the APFM report states. In these regions, memory care costs rose 2.2% and 2.1% per year, respectively, while assisted living saw a price growth of 1.7% and 1.9% per year—the quickest price growth per year, according to the APFM Index.
Meanwhile, the price of independent living is rising most rapidly in the South at 3.9% per year, and in the Midwest at 3.1% per year.
In all, APFM notes that the Index underlines the importance of financially preparing for aging, while also validating the general perception that senior care costs are keeping pace with the rising number of seniors in the U.S. across all regions.
“In developing the National Senior Living Price Index we say an opportunity to create a tool that would help families plan for the care of aging loved ones, while also providing a tool for our network of senior living communities to track this evolving industry on a broad scale,” said Ed Nevraumont, chief marketing officer at APFM.
Written by Jason Oliva