Americans shopping for long-term care coverage this year are finding something their parents never had to budget for: another round of premium increases on policies they already own.
Major carriers have filed for rate hikes ranging from 10% to more than 50% in some states, according to filings tracked by state insurance departments.
And if you're just now pricing a new policy, expect to pay significantly more than someone who bought the same coverage five years ago.
A healthy 60-year-old couple can expect to pay roughly $3,800 to $4,500 a year combined for a policy with a $165,000 initial benefit pool, according to the American Association for Long-Term Care Insurance.
A single 60-year-old man might pay around $1,500 to $2,000 annually, while a woman the same age often pays 30% to 50% more — because women statistically live longer and file more claims.
Wait until 65, and those premiums can jump another 20% to 30%.
Insurers badly misjudged the 1980s and 1990s policies they sold.
They assumed more people would lapse their coverage, fewer would file claims, and interest rates would stay higher.
Instead, people kept their policies, lived longer, and needed care for years.
Now carriers are playing catch-up, and regulators in many states are approving increases to keep the companies solvent.
The sticker shock has pushed many shoppers toward alternatives.
Some buy hybrid policies — a life insurance or annuity product with a long-term care rider — which cost more upfront but lock in premiums.
Others self-insure by earmarking a portion of retirement savings.
A few rely on Medicaid, but that generally requires spending down most assets first, and it limits which facilities you can use.
If you already own a policy, you have options before accepting a hike.
You can reduce your daily benefit, shorten the benefit period, or drop inflation protection — each lowers the premium but shrinks your payout.
Some states let you switch to a pared-down policy with no new medical underwriting, which matters if your health has changed.
Call your insurer and ask exactly what reduction options they offer before the increase takes effect.
For new shoppers, the smartest move is to compare at least three carriers through an independent agent, and to ask about shared-care riders if you're buying as a couple.
That lets one spouse tap the other's unused benefits, which can stretch coverage without buying two full policies.
Also check whether your state runs a Partnership program — it lets certain policies protect some assets from Medicaid spend-down, which can be worth real money.
One more thing: don't confuse long-term care insurance with the short-term care coverage some employers offer.
Those policies typically cap out at 360 days and won't cover an extended nursing home stay.
Read the benefit period carefully, because that single number drives most of the premium.
Our take: long-term care insurance is neither a slam dunk nor a scam — it's a math problem.
If you have modest assets and no family willing or able to provide care, coverage can protect a surviving spouse from financial ruin.
If you're wealthy enough to self-fund, you may not need it at all.
Final Thoughts
The worst outcome is buying a policy you can't afford to keep for 30 years, because lapsed coverage pays nothing.