The price of long-term care coverage is moving in one direction, and it isn't down.
Major insurers have pushed through another round of rate increases this year, with some policyholders seeing premiums jump 20% to 50% on renewal notices.
For anyone who bought a policy years ago expecting a fixed bill, the envelope in the mailbox has become a source of genuine dread.
The math behind the hikes is not mysterious.
Insurers priced many policies in the 1990s and 2000s using assumptions that turned out to be wrong: fewer people let their coverage lapse than expected, interest rates stayed low for a long stretch, and care costs rose faster than projected.
When claims run higher and investment returns run lower, the company comes back to the people already holding policies.
A healthy 60-year-old couple shopping today might pay roughly $3,000 to $4,000 a year combined for a modest policy, according to industry cost surveys.
A single 60-year-old man could pay around $1,500 to $2,000 annually, while a woman the same age often pays more, since women tend to live longer and file more claims.
Wait until 65 and those numbers climb again.
What you get for that money has also changed.
Traditional policies that pay a set daily benefit are less common.
Hybrid products, which bundle life insurance with a long-term care rider, now dominate the market.
They cost more upfront, often $50,000 to $100,000 in a single premium, but the money isn't lost if you never need care.
The alternative is paying out of pocket, and that's the part that shocks people.
A private room in a nursing home runs well over $100,000 a year in many states.
Home health aides bill by the hour, and those rates keep rising with wages.
Medicare generally doesn't cover long stays, and Medicaid only kicks in after you've spent down most of your assets.
Start by checking whether you already have coverage through an old employer or a veteran benefit.
Then price a few options, including hybrid policies and shorter benefit periods, which cut costs significantly.
Some advisors suggest self-funding part of the risk and insuring only the catastrophic tail.
One more thing worth knowing: most states have guaranteed a right to appeal a rate increase, and some regulators have pushed back on the largest requests.
Call the insurer, ask about reduced benefit options, and check with your state insurance department.
Our take: long-term care insurance isn't right for every budget, and the rising premiums are a real burden.
Final Thoughts
But going without a plan at all is a bet that nothing goes wrong, and that's the one bet most families end up losing.