Americans to Spend $200 Billion on Home Health by 2027

BIRMINGHAM, Ala. (July 29, 2019)—Americans will likely spend a whopping $200 billion on home health care services by 2027—a 72% projected increase in spending between 2011 and 2027—according to an analysis of homecare costs done by Senior Living.

Yet despite the large numbers, in-home care remains far cheaper than moving into a senior living facility. In 2018, a home health aide cost roughly $50,000 per year, or 91% of an average household’s annual income, while a private room in a nursing home costs more than $100,000, according to the study.

To calculate the cost of a homecare around the country, Senior Living used Genworth Financial’s Cost of Care Survey 2018 and assumed an aide working 44 hours per week. Senior Living used median income figures reported to the U.S. Census Bureau. (Few home health patients actually receive 44 hours/week of care from a home health aide, according to the National Association for Home Health & Hospice.)

The study found that the least affordable state to receive homecare is Washington, where it costs 145% of residents’ average annual income. Maryland is the most affordable state at 65% of residents’ annual income. Out of the 50 largest metro areas in the United States, the metropolitan area of Buffalo/Niagara Falls, New York, spends the most on home health compared to residents’ income, at 105% of residents’ annual income; while Baltimore, Maryland only spends 67% of residents’ average annual income.

The majority of the more affordable metro areas for home health are on the East Coast in the Mid-Atlantic region, with the exception of San Jose, California, where residents would spend 68% of their income if they utilized in-home care.

As the population ages, the demand for home health aides is expected to surge. The median salary for a home health aide nationally is $24,000, but several cities exceed that rate. For example, an aide in Sioux City, Iowa can average $45,000 per year, and Oxnard, California averages $40,000 per year, according to the study. Eight of the top 25 cities for home health aide pay are located in California.