Caring for loved ones at home has never been more expensive.
The price for “care of invalids and elderly at home” rose 13.9% in April 2024 from a year ago, coming close to the record 14.2% increase reached in March, according to the Bureau of Labor Statistics. By comparison, prices year-over-year have risen an average of 2.6% since Dec. 2005.
The biggest monthly gain on record happened in 2024, with prices rising 5.9% in March from February. The biggest monthly decline was nearly 2% in Dec. 2021.
The at-home care cost category tracked by the government includes fees paid to individuals or agencies for the personal care of invalids, the elderly or convalescents, covering work such as administering medicine, food preparation, bathing and other household chores.
Workers are paid an average of $27 an hour, or $42,000 a year, and home care remains cheaper than nursing homes, according to the AARP.
Why are costs for at-home care higher?
The main reason at-home care costs have shot up is because labor costs have risen since the pandemic and demand has grown due to an aging population. Between 2021 and 2031, the U.S. economy will create more than 1 million new direct care jobs but need to fill more than 9 million open direct care positions, according to eldercare and disability nonprofit PHI.
“When you have increasing demand and shrinking supply, the market works: You get higher prices because people have to pay more to find people to do this work,” Marc Cohen, professor of gerontology at the University of Massachusetts Boston, told ConsumerAffairs.
He said these jobs are often held by immigrants and people from poorer communities, but market competition, demand and challenges in attracting workers are driving up wages. At-home care agencies now often pay benefits to at-home workers when many didn’t have healthcare before.
“Until the pandemic, people were grossly underpaid,” he said. “It costs more because it was so undervalued in the past.”
Profits aren’t the reason that costs are up, despite the at-home care industry having increasingly shifted to private companies, he said.
“The notion that there are enormous profits to be made in home healthcare and that the reason the prices have been increasing is because there has been a major extraction in profits – that’s just not true,” Cohen said.
What could bring at-home care costs down?
A stronger pool of labor would go a long way in helping stabilize at-home care costs and potentially bringing them down. To do this, governments need to ensure enough of their healthcare funding is going directly to workers, worker conditions need to improve and better career opportunities need to become available, Cohen said.
Better worker conditions in nursing homes, such as the so-called greenhouse model of smaller facilities, might also help since there is competition between nursing homes and at-home care agencies to hire people, he said.
Yet if immigration came down in the U.S., prices for at-home care would go up even more, Cohen said. “There simply will not be enough people to provide this service,” he said.
More predictability in immigration could help stabilize wage growth in the at-home care sector, Cohen said, but he cautioned that “we are not there yet.”
How to get good care at-home care
Lowering costs is difficult in the present market and people looking for at-home care should be more concerned with getting the best care possible, eldercare experts say. Cohen said people hiring an at-home care worker should be more concerned with their trustworthiness and communication skills than saving money.
“This is a highly personal service that is provided,” he said. “Sometimes the price has very little to do with the quality.”
Agencies arranging for care can help by ensuring workers have licensing, training and insurance. Another way to find good care is to look at registries, such as the nonprofit Carina, which connect people with trained, licensed workers, Emily Dieppa, vice president of workforce innovations at nonprofit PHI, told ConsumerAffairs.
Still, consider the number of job openings at an agency to know how well they are retaining staff, she said. If possible, try to speak with a worker to get an idea of how well they are treated.
“Employers who prioritize and support their workers as an integral part of their business model are better positioned to deliver high-quality, person-centered care, which ultimately enhances outcomes and well-being,” Dieppa said.
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