Northwestern Mutual study examines costs of long-term care across the country

Northwestern Mutual Life Insurance CompanyDec 9 2010

Northwestern Mutual released today its 2010 Cost of Long-Term Care study, which examines costs for home health care providers, assisted living facilities and nursing homes across the country.

“People are living longer and health care costs continue to rise, making long-term care an increasingly important risk to address”

This research is important in understanding the accessibility and affordability of different types of services by geographic location, and helps individuals make informed decisions about their long-term care options and costs.

Findings mirrored results from the 2008 study, which revealed that costs vary widely based on type of care and geographic location. For example:

• Assisted living costs are highest in the East, where six states and Washington DC have average costs above $4,000/month. This compares to North Dakota - the least expensive state in terms of assisted living - with average costs of $1,901/month.
• Nursing home costs in Alaska are the highest at $538/day on average, which is $186 more a day than the next most expensive - Connecticut - at $352/day. Louisiana is the least expensive at $127/day.
• Residents of Missouri and Montana on average spend $19/hour for home health care, whereas West Virginians have average costs of $60/hour. Assuming an 8-hour day, five days a week, this amounts to an additional $328/day, or more than $85,600/year in West Virginia versus Missouri or Montana.

The significant implications of these costs for individuals' long-term financial security is further underscored by a separate research study - Financial Matters - in which Northwestern Mutual found that only 17 percent of Americans can provide an estimate of long-term care costs within 20 percent of their state's average.

"People are living longer and health care costs continue to rise, making long-term care an increasingly important risk to address," said Steve Sperka, Northwestern Mutual vice president - long-term care. "It will take greater financial resources for residents of some states to protect their assets and lifestyle through retirement than others. Understanding the reality of long-term care costs in your area - and the potential impact to your financial security - is a critical step in developing a sound financial plan that won't be derailed by a lack of awareness about long-term care risk."

Resources for Long Term Care Planning

Northwestern Mutual has a range of resources to help individuals think about and plan for long-term care needs:

• Visit the Cost of Care Calculator to help you better understand the potential cost if you were to require long-term care services
• Visit the Lifespan Calculator to estimate out how many years you may live past retirement
• Learn more about the long-term care costs and options available to you