Buy Your Long-Term Care Insurance Now


Health insurance rates are rising all over, but none are rising more than those for long-term care. Projected costs in 2011 are set to rise by about 5%, and they will continue to rise through the rest of this decade. What can you do to keep your options open down the road? You can buy some low-cost LTC insurance now, for starters.

We've written before about how to make LTC insurance work for you and now is a great time to take advantage of low rates to prevent incurring higher insurance costs down the road.

The hard data on that issue comes from MetLife (Stock Quote: MET), which comes out with an annual “check-up" on the costs of long-term health care. Its most recent edition paints a grim picture for Americans, especially those 77 million Baby Boomers either in retirement or inching their way toward their golden years.

Nursing home and assisted living care is getting shockingly expensive and may incite sticker shock on even the most thick-skinned consumers.

According to MetLife’s Market Survey of Long-Term Care Costs:

  • Private room nursing home rates rose 4.6% from 2009 to 2010 to a whopping $229 per day, or $83,585 per year.
  • Assisted living costs spiked 5.2% to $3,293 per month, or about $39,000 annually.
  • Both costs are accelerating at a faster pace than from 2008 to 2009, when growth rates averaged 3.3% for nursing home and assisted-living care.
  • The per-hour cost of a home health aid stayed pretty much the same as 2009 – at $21 per hour.
  • Adult day care services also remained static, at $67 per day.

As the report notes, the growth rate for long-term care significantly outpaces the current rate of inflation, which is 3%.

How much you pay for long-term care, however, also depends on where you hang your hat. Alaskans, for example, pay the most for a private nursing home room, $687 per day. Conversely, if you live in Louisiana, that cost can run as low as $138 per day.

If you’re looking for assisted-living care, Washington, D.C. sports the highest price tag at $5,231 per month. But residents of Little Rock, Ark. only pay $2.073 for the same services, MetLife reports.

Obviously, MetLife is an insurance firm, and therefore has no problem shining a spotlight on a problem that may be mitigated with good long-term care insurance.

“As the population ages, there are more and more people among us who will need long-term care,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “While families continue to provide the lion’s share of care, paid care is commonly part of the equation, and the costs can derail even the best financial plan. There is very good reason for individuals and families to look into savings plans, annuities and long-term care insurance to hedge the possibilities.”

That presents a potentially serious dilemma for Americans in their fifties, sixties and seventies. As the average age for nursing home residents is 83, according to MetLife, common sense says that if you wait until your eighties to pay for long-term care, the price will be astronomical at current rate projections.

That’s where long-term care insurance actually can help. It’s the old “you can pay me now or pay me later” conundrum. But for a little money down now – most monthly premiums for a consumer in his or her fifties cost less than $100 per month – you can minimize much of the costs of long-term care, should you need it.

A $100 per month bill now, or $5,000 per month down the road? It seems like an easy call.

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