The cost of assisted living rose 1.28% in the past year, according to the latest Cost of Care Survey from insurer Genworth Financial (NYSE: GNW).
The national median cost for a one-bedroom unit in an assisted living community is now $4,051 per month, or $48,612 per year, according to the survey. The five-year annual growth rate for assisted living costs clocked in at 2.97%.
This year’s cost increase was dramatically less than last year’s cost of care increase of 6.7%. That may have something to do with oversupply.
“Several industry observers … said the reason is that [assisted living communities] have overbuilt, which has led to an oversupply of capacity – perhaps hitting a saturation point,” Julie Westermann, a representative for Genworth, told Senior Housing News.
Assisted living costs have risen in a big way over the past decade and a half. The industry has seen a nearly 69% increase in assisted living community cost of care since 2004, according to the latest data.
The cost of care for assisted living varied widely by location. The highest cost was in Washington, D.C., where monthly the cost of care is $11,288, while the lowest cost was in Missouri, where the monthly cost of care is $2,881.
For the latest survey, Genworth contacted 53,901 long-term care providers in the U.S. and completed 15,178 surveys for assisted living communities, skilled nursing facilities, adult day locations and home care providers.
By comparison, the annual median cost of a home health aide increased 4.55% to $52,624 over the past 12 months, while the annual cost of care for a semi-private or private room in a skilled nursing facility rose 0.96% and 1.82% to $90,155 and $102,200, respectively.
The median average cost of adult day services — an evolving industry segment that’s attracted new entrants from across the senior housing world — grew 4.17% to $75 per day, or $19,500 annually for five days of care a week.
Meanwhile, the annual median cost of homemaker services, which include cooking, cleaning and running errands, rose 7.14% to $51,480 in the past year.
As in previous years, a tight labor market and rising wages in some states are contributing to the rise in care costs across all market segments.
On the senior living side, industry stakeholders are searching for new ways to make such care more affordable for middle-market residents, including by unbundling some services or disrupting traditional capital structures. And providers such as Roseville, Minnesota-based Presbyterian Homes & Services and Hickory, North Carolina-based Affinity Living Group are currently hammering out models meant to serve the middle-market with lower than average rates.