What Journalists Should Know About Long-Term Healthcare
Healthcare costs continue to rise, and understanding long-term healthcare is essential for journalists who want to provide comprehensive and informative reporting while up against a hostile system. Long-term care (LTC) insurance is an important aspect of this topic, as it helps individuals cover expenses associated with nursing homes, hospice care, adult day care, and assistance with daily living activities. However, this insurance is not a one-size-fits-all solution, and its costs and intricacies can be influenced by various factors.
Factors Influencing Long-Term Care Insurance Costs
LTC insurance costs are not set in stone and can fluctuate based on several key factors:
Age: The age at which an individual purchases LTC insurance plays a significant role in determining its cost. Younger individuals can secure coverage at a lower initial cost, making it more affordable for them.
Health: Pre-existing health conditions can affect an individual's eligibility for LTC insurance and lead to higher premiums for those who are approved. Insurers may even deny coverage to individuals in poor health.
Gender: Women generally pay higher long-term care insurance rates compared to men. This is because women tend to live longer and are statistically more likely to require long-term care services.
Amount of Coverage: The specific details of an LTC insurance policy, such as the pre-set daily limit, maximum benefits, and elimination period, all have an impact on costs.
Riders: Some LTC insurance policies offer riders that provide additional coverage. For instance, inflation protection riders can increase coverage amounts by a predetermined annual percentage.
Individual vs. Joint Coverage: Married couples have the option to purchase a joint LTC insurance policy, which can be more cost-effective than two separate policies. However, this approach combines the coverage limit for the couple, as opposed to having separate limits.
Choice of Insurance Company: As with any type of insurance, long-term care insurance rates vary among companies. It is advisable to obtain quotes from multiple insurers offering the same level of coverage for accurate cost comparisons.
Long-Term Care Insurance Rates by Age
The cost of LTC insurance also varies significantly based on age, with premiums typically increasing as individuals grow older. Below are sample annual costs—per the American Association for Long-Term Care Insurance—for a $165,000 LTC insurance policy for different age groups, with and without inflation growth provisions:
Male, age 55: $900 (without inflation) - $3,500 (5% inflation)
Female, age 55: $1,500 (without inflation) - $6,200 (5% inflation)
Couple, both age 55: $2,080 (without inflation) - $8,575 (5% inflation)
Male, age 60: $1,200 (without inflation) - $3,820 (5% inflation)
Female, age 60: $1,960 (without inflation) - $6,800 (5% inflation)
Couple, both age 60: $2,550 (without inflation) - $8,550 (5% inflation)
Male, age 65: $1,700 (without inflation) - $4,200 (5% inflation)
Female, age 65: $2,700 (without inflation) - $7,225 (5% inflation)
Couple, both age 65: $3,750 (without inflation) - $9,575 (5% inflation)
Addressing Long-Term Care Insurance Rate Increases
One critical aspect of reporting on this topic is making clear how policyholders can manage long-term care insurance rate increases. Rate hikes can be a significant burden, but there are strategies to mitigate their impact:
Adjusting Coverage Perameters: Policyholders can reduce the daily benefit, benefit period, and maximum benefit amount to lower their premiums.
Limit Inflation Protection: Scaling back coverage or eliminating inflation protection riders can also help reduce premiums.
Increase Elimination Period: Lengthening the elimination period, which is the time before the policy starts paying for LTC claims, can make premiums more affordable.
Long-Term Care Costs Without Insurance
Journalists should also highlight the importance of long-term care insurance by illustrating the substantial costs of long-term care without such coverage. The following figures from the Administration for Community Living provide insights into the expenses associated with various types of long-term care:
Semi-private room in a nursing home: $6,844 per month
Private room in a nursing home: $7,698 per month
Assisted living facility, one bedroom: $3,628 per month
Health aide: $20.50 per hour
Homemaker services: $20 per hour
Adult day care center: $68 per day
Clearly, these expenses can become a financial burden for those without long-term care insurance,which is why this kind of coverage is valuable for consideration for future healthcare needs.
When is Long-Term Care Insurance Typically Needed?
According to the American Association for Long-Term Care Insurance, the majority of LTC insurance claims occur after the age of 75, with only 19% of claims beginning before the age of 75.
The following percentages show the age at which LTC insurance benefits typically begin:
69 and under: 8%
70-74: 11%
75-79: 19%
80-84: 27%
85-89: 23%
90-94: 9%
95 and over: 3%
Pros and Cons of Long-Term Care Insurance
Here are some pros:
Supplemental Healthcare Coverage: LTC insurance complements Medicare by covering expenses that Medicare does not, particularly for long-term care needs. It helps individuals pay for necessary care in various settings, including at home, in nursing homes, or assisted living facilities.
Financial Security: During retirement, when living on a fixed income, long-term care costs can be financially challenging. LTC insurance offers a solution by offsetting these expenses and providing peace of mind.
Support for Loved Ones: Long-term care insurance ensures that individuals have a funding source to cover their care, alleviating the burden on loved ones, such as spouses and children, who might otherwise struggle to find ways to pay for care.
Here are some cons:
Eligibility Chances: Not everyone is eligible for long-term care insurance. Insurers may reject coverage for those with pre-existing conditions, poor health, individuals over 70, or those already in need of long-term care. It’s worth noting that provisions against this exist under the Affordable Care Act for almost everything except long-term care insurance.
Expense: Long-term care insurance can be costly, especially for individuals with health issues. Premiums tend to increase with age and health-related risks.
Limited Availability: Only a handful of insurance companies offer long-term care coverage, which limits choices for consumers. Currently, six insurers provide these policies on the market.
Long-term healthcare and long-term care insurance are crucial subjects for journalists to cover, considering the aging population and increasing healthcare costs. Journalists can provide valuable—if not brutally honest—information to help readers make informed decisions about their long-term healthcare needs and to hopefully put pressure on the healthcare industry as a whole by scrutinizing its practices.
