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
