The cost of nursing home care continues to rise. Seniors should plan for continued increases.
A new study released by the Lincoln Financial Group reveals that on average the cost of semi-private and private nursing home care in the U.S. increased by 2% in 2014 and that increase is consistent with other recent years. McKnight's reported on this study in "Average cost of nursing home care rises 2% annually, Lincoln report shows."
The study also reveals that nursing home costs vary greatly by region of the country and metro area. Nursing home costs in Connecticut are almost triple the costs in Oklahoma, for example. The difference might be the result of real estate costs in different regions and differences in the price of labor.
To put the rising costs in perspective, overall inflation in the U.S. was 1.58% in 2014. Nursing home costs thus rose greater than inflation, but not alarmingly so. In fact, 2% is also the target inflation rate the Federal Reserve aims for in any given year.
Of course, in the future inflation in nursing home costs might not continue at the 2% rate. It depends on numerous external factors.
Nevertheless, it can generally be assumed that the costs will continue to rise over time along with the costs of most everything else.
The important take away for individuals is that when making retirement and estate plans, it should be assumed that prices will be greater than they currently are. The 2% per year increase in costs can serve as a useful guide for people as they make their plans.
Reference: McKnight's (April 21, 2016) "Average cost of nursing home care rises 2% annually, Lincoln report shows."
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