One tool Americans have for managing their eldercare expenses may be quietly fading away right when it is most needed. Long-term-care insurance allows Americans to pay an annual premium in exchange for coverage of eldercare expenses in nursing homes, assisted living programs, and even home care situations. But the WSJ reports this insurance is quickly becoming more and more difficult to obtain:
Fewer carriers are offering the coverage, which helps pay for future nursing-home, assisted-living and home care. Those that still do are raising premiums on new and longtime policyholders.For example, a 55-year-old single man buying long-term-care insurance can expect to pay $1,985 a year for $164,250 in total benefits, including a 3% annual inflation-protection rider, according to the American Association for Long-Term Care Insurance, a trade group. The annual cost is up 15% from two years ago.
In 2011, William Galston argued that wider use of long-term-care insurance could be a possible solution to the eldercare crisis, but if this WSJ story is accurate, that’s looking like an increasingly remote possiblity.Fortunately, this doesn’t mean the elderly are out of options. Another, more promising approach would be looking into creative ways to incentive and reward at-home caregivers. As an excellent long-form read in The Atlantic points out, one big obstacle towards shifting more eldercare to the home setting is that Medicare does not really reimburse for it—even though it costs less than hospitalization. One possible policy shift here would be to find ways, through tax credits or otherwise, to pay children or relatives for taking care of aging family members in their home.Getting people out of institutions and back into homes will be a key to moderating the financial crush of baby boomer aging, especially as long-term-care insurance becomes harder to get.