N.Y. Times: Senior Care Costs Causing Sticker Shock

| May 16, 2013

The rising cost of long-term care (LTC) is causing a “sticker shock” for many older Americans at risk of not being able to afford services in their old age, reports The New York Times

In the last year, the average annual costs increased for assisted living (4.45%), nursing homes (3.60%) and even adult day care (6.56%), according to Genworth Financial’s 2013 Cost of Care Survey

As these costs increased, so did the rates of LTC insurance policies. In April 2013, John Hancock and Genworth both raised their LTC insurance rates for women by 15%-40%, writes the NY Times article. 

While in the past retirees could lean on defined-benefit pensions to help them afford the costs of LTC, while also relying on the sale of their homes for some added financial help, the market crash of 2008 diminished the value of many retirement savings. 

Now with the impending aging population only to swell with the coming of the Baby Boomer generation, the issue of how to pay for care is becoming more urgent than ever, according to Maribeth Bersani, senior vice president for public policy at the Assisted Living Federation of America (ALFA). 

To address this challenge, a 15-member LTC committee was even established in Washington, D.C., with the purpose of finding more affordable solutions for older Americans.

On a local level, state lawmakers have been pushing for greater transparency in life insurance policy, specifically for insurance companies to make it clear to policyholders that they can sell a policy to pay for long-term care.

As costs rise, the need to pay out of pocket can be shocking both financially as well as emotionally, writes the article.

Read The New York Times article.

Written by Jason Oliva


Category: Senior Housing

Comments (1)

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  1. Dave Wiltsee says:

    LTC insurance will soon go the way of the dodo bird. The time has passed for the for-profit insurance industry to assure the future well-being of America's middle class. Simply put, Americans can no longer afford a decent standard of living in the present and pay the increasingly outrageous prices to insure their long term futures.
    Those with the ability to save and invest are better advised to keep their options open, rather than committing to yet another form of insurance. LTC insurance is for the rich and the fortunate unionized government worker who has access to generous subsidies. LTC insurance is irrelevant for 95% of current and future seniors.