The cost of receiving care has continued to increase significantly each year across all care options, except adult day care. The most expensive long term care option is a private nursing home. Since 2011, the median annual cost for a room has grown by nearly 19 percent to over $92,000.
Americans are also paying more for homemakers or home health aides. Although such in-home services are the most popular care option, nearly one-third of individuals have serious misconceptions about the expenses. Many incorrectly believe such services cost under $417 per month. In reality, the national and state-by-state median rate averages above $3,800 per month.
The annual caregiving survey analyzes state and national care costs. It aims to help Americans become aware of various long term care options and their potential costs. Many people do not understand long term care expenses until they experience them.
“At least 70 percent of Americans over age 65 will need some form of long term care services and support during their lives,” said Genworth President and CEO Tom McInerney. “[There is a] huge disparity between what consumers think costs are and what they actually are.”
As a result, it is important for individuals to have an honest conversation with family members about what type of care they would like to receive when the need arises. Learning about the costs will help Americans plan ahead for future expenses before it is too late.
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The nation’s largest seller of long-term care insurance, Genworth Financial, is engages in an “intense, very broad, and deep review of all aspects of our long-term care insurance business,” President and CEO Tom Mclnerney told investors.
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Sources within the industry say that the firm may withdraw from the market in the event it does not win regulatory approval for new rate hikes on roughly 650,000 older, existing policies.
In addition, the firm requires state to approve changes that would enable the company to sell policies that more strictly underwritten and that offer shorter benefit periods, lower daily benefits, and other changes.
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“We are prepared to take actions such as suspending sales in states and ending new sales through distribution channels where we cannot offer products within an acceptable risk-adjusted return,” the spokesman said.
A major downturn has created a struggle in the long-term care insurance business as the result of a combination of benefits that are higher than expected, and lower than anticipated returns on lower investments.
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The weak investment incomes can mostly be attributed to an extended period of historically low interest rates. Long-term care insurance companies earn a major portion of their revenues from their investments of premium income, predominantly in high-grade bonds.
Source: Forbes
Christopher J. Berry is an elder law lawyer in Michigan Dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.theeldercarefirm.com/ or call 248.481.4000
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