Do you know that almost 70% of people turning age 65 will receive some type of long term care during their lives? Unfortunately, the cost associated with LTC doesn’t come cheap. According to the U.S. Department of Health & Human Services, the average costs for long-term care in the United States (in 2010) were:
$205 per day or $6,235 per month for a semi-private room in a nursing home
$229 per day or $6,965 per month for a private room in a nursing home
$3,293 per month for care in an assisted living facility (for a one-bedroom unit)
$21 per hour for a home health aide
$19 per hour for homemaker services
$67 per day for services in an adult day health care center
Depending on the area you live, specialized care needed, time of day that care is provided, and additional factors, these averages could increase drastically.
With the rising costs of LTC, many carriers are continuing to phase out of traditional LTC coverage and rolling out numerous alternatives. To help you understand this changing landscape, we’ve created a simple guide on the types of products available.
What It Is
A standalone policy that provides care a person may need in a nursing home, assisted living facility, adult day care or home health care.
Why It’s Good
Does what it is designed to do if a person needs care
Meets Medicaid Partnership requirements to protect a larger amount of assets from Medicaid spend down
Still a reasonably priced solution for some people
Tax Deductible for business owners paying the benefit out of their business
Why It’s Bad
Underwriting includes more exams, more doctor records and fewer approvals
Rate increases and increased reserving
Genworth downgraded – they were a key carrier in LTC for years
No more lifetime benefits
5% compound inflation very expensive
Very few limited pay options
Traditional Long Term care on its way out
Carriers
Fewer companies offering traditional long term care; harder to find as companies phase out. Mutual of Omaha, Mass Mutual.
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The Simple Guide to the Confusing Long Term Care Market
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