WASHINGTON—The March Consumer Price Index (CPI) Report showed an annual price increase in home health care costs at 14.2%. This is the largest reported increase from the CPI since 2005, when the Bureau of Labor Statistics first started gathering data on the industry.
The CPI measures the change in prices paid by consumers for goods and services and reflects spending patterns for urban consumers, urban wage workers and clerical workers. However, the CPI does not include the spending patterns of people living in rural nonmetropolitan areas, farming families, people in the armed forces and those in institutions such as prisons or mental hospitals.
The report also showed an increase of 8.3% for the cost of outpatient hospital services and a 3.9% increase in nursing homes and adult day services.
For medical care, CPI measures total price changes, including both the costs consumers pay out-of-pocket and those insurers (public and private payers) pay to providers and pharmacies. While CPI measures total price changes, the index weights spending to match consumers’ out-of-pocket costs, including consumers’ spending at the point of care and on health insurance premiums.
Those in the industry have stated multiple reasons for these increases, from inflation and worker shortages, along with rising wages (although wage growth is slowing down, and pay is still low, with homecare workers earning the least) and rate hikes by insurers. "Dying Broke"—a joint KFF Health News and New York Times investigation in late 2023—examined the financial costs of long-term care in America for the elderly.
"With 10,000 Baby Boomers turning 65 every day until 2030, and seven out of ten of them likely to need long-term care services and support at some point, there is increased demand for skilled workers in the long-term care space," said Jamala Arland, president and CEO, Genworth U.S. Life Insurance.
The report comes on the heels of President Joe Biden's declaration of support for the future of homeare in his State of the Union Address.
"Imagine a future with home care and elder care so seniors and people living with disabilities can stay in their homes and family caregivers get paid what they deserve," Biden said. "Tonight, let’s all agree once again to stand up for seniors."
