Monday, May 23, 2011

Long Term Care: Rising Tides

FoIB Holly R sent along this rather disturbing news:

"Costs of assisted-living care in Ohio are growing faster than the national average ... In Ohio, the annual cost of long-term care in an assisted-living facility is $39,900, and costs have risen 9 percent annually over the past six years. Nationally, the average cost is $39,135, with average yearly increases of 6 percent."

Some perspective's called for here, of course. For one thing, Ohio's average cost is only about 2% higher than the national. For another, this means that the average daily cost for assisted living in the Buckeye State is just shy of $110 per day. Most agents I know recommend about $150 per day for Long Term Care insurance (LTCi).

Oh, and one more thing: according to the article, the cost of nursing home care is somewhat lower in Ohio than nationally.

Still, this underscores the need to at least consider a LTCi purchase, since that close to $40,000 per year cost can quickly eat up one's life savings.

There's another reason that LTCi may make sense:

"Private long term care (LTC) insurance helps insureds with moderate disabilities stay in their homes longer and does not appear to crowd out informal caregiving."

Most seniors I've spoken with would prefer to stay in their own homes, rather than face the upheaval involved in moving and downsizing. Obviously, someone in the throes of Alzheimer's may not have that choice, but for those with less serious conditions, having the means to stay in one's home seems like a good thing.

On the other hand, the same study showed a disturbing phenomenon: "the researchers ... [identified] survey participants who believe they have LTC insurance but do not actually have it: Li and Jensen say confused consumers make typical LTC insurance penetration figures about 50% higher than they ought to be."

That's scary.
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