Washington, D.C. residents that are either retired or who have elderly parents that are retired are well aware of the challenges surrounding long term care. Decades ago, people could count on programs such as Medicare and Medicaid to cover nearly all, if not all, of those expenses. However, with the changes in the system and the ever-rising cost of care, long term care planning requires more forethought.
Many people purchased long term care insurance to help with the costs. This insurance used to be affordable, but that is changing. It has come to light that companies that were selling the policies were underestimating the respective lifespans of its customers. Companies were also banking on a much larger percentage of people to let their coverage lapse.
As a result, where there used to be about 100 insurers offering the policies, there are now only about a dozen. Those remaining companies have had to raise premiums as much as 30 percent for new customers, and existing customers are seeing their premiums go up anywhere from 25 percent to an unbelievable 77 percent. These facts make buying this kind of insurance almost impossible for many people.
This doesn't mean that people in the Washington, D.C. are that are looking ahead to long term care planning can't get this type of insurance. What it does mean, however, is that like Medicaid and Medicare, there may need to be some extra supplementation made to cover the cost of long term care. Ultimately, having a plan in place is still the most effective way to combat the rising cost associated with long term care. Seeking professional advice regarding the best way to do that could be beneficial.
Source: marketwatch.com, "Long-term-care insurance sticker shock for retirees," Matthew Heimer, July 2, 2013