A doctor or a nurse placing money in her pocket.

The caregiver crisis and skyrocketing rates for home care workers could be putting the home care industry at a competitive disadvantage against assisted living, according to a new study by financial services company Genworth.

The company’s 2021 Cost of Care Survey found the annual out-of-pocket rates of home health aides increased 12.5% to $61,776 last year. That was nearly triple the rate increase of 4.65% for assisted living, which cost roughly $54,000 annually. The cost of personal care services jumped 10.64% to just under $59,500. Although the semi-private room rate in a skilled nursing facility increased less than 2%, nursing homes still remained the priciest long-term care option at approximately $95,000 annually.

Brian Haendiges, president and CEO of Genworth Life Insurance, attributed the rising rates to the caregiver crisis.

“Even more than in prior years, the increased demand for labor and the current national labor shortage have made it more difficult to hire and retain long-term care professionals,” Haendiges said in a statement. “Those challenges are coupled with the broader trend of growing wages and increases in the cost of doing business associated with regulatory, employee certification, and equipment costs, which have all been exacerbated by the pandemic.” 

Home Instead CEO Jeff Huber acknowledged the rising costs are a concern but doubted they will discourage seniors from choosing to age in place.

“The pandemic has shown us that home is the safest place to care for people,” Huber told Genworth in a statement.

The study pointed out that the price of caregiving has steadily been rising since Genworth began its survey 18 years ago. It said over the past five years, the hourly cost of home health aides has been growing at a compounded annual growth rate (CAGR) of 5.92%. The hourly cost of a personal care worker has increased at a CAGR of 5.39%.  The CAGR for assisted living and skilled nursing increased 4.40% and 2.93% respectively.

Genworth researchers blamed minimum wage increases in a number of states and the supply/demand imbalance of available workers for putting added upward pressure on the cost of care. 

Genworth polled nearly 68,000 long-term care providers, including 4,200 home care agencies across 50 states for the study.