The price of insuring against a nursing home stay keeps going up, and it's catching many older Americans off guard right as they approach the years they'd actually need it.
A 65-year-old couple shopping for a policy that covers roughly $165,000 in future care benefits now faces about $3,900 a year in combined premiums, according to industry cost surveys.
A single man pays around $1,050 a year for a comparable plan, while a single woman pays closer to $2,200 — a gap that exists because women tend to live longer and file more claims.
Those numbers sound manageable until you look at how they move over time.
Several major insurers have pushed through double-digit rate increases on existing policyholders in recent years, and state regulators have approved many of them.
A premium quoted at 60 can look very different by 75.
Insurers badly misjudged in the 1990s and 2000s how long people would live and how expensive care would get.
Low interest rates eroded the investment returns they'd counted on to fund payouts.
Many carriers simply left the market, leaving fewer companies and less competition.
What care actually costs today explains the anxiety.
A private room in a nursing home runs north of $100,000 a year in many states, and a home health aide working 40 hours a week can top $60,000 annually.
Medicare covers skilled nursing only briefly and generally doesn't pay for long-term custodial care.
Medicaid kicks in only after you've spent down most of your assets.
So what are your options if the sticker price scares you?
Buying $100,000 or $150,000 in benefits instead of $300,000 cuts premiums sharply, and it still shields a chunk of your savings.
These combine life insurance or an annuity with a long-term care rider.
You pay a lump sum or fixed premiums, and if you never need care, your heirs typically get a death benefit.
The trade-off is a higher upfront cost and less flexibility.
Third, ask about shared care riders for couples.
One policy can cover both spouses, and if one doesn't use their share, the other can.
That often costs less than two separate policies.
Fourth, check whether your state runs a partnership program.
These let you keep more assets and still qualify for Medicaid after buying a qualifying policy.
Finally, don't overlook the boring stuff.
A health savings account can be used for qualified long-term care expenses and premiums up to limits set by the IRS.
Some employers and professional associations offer group long-term care plans with lower rates than individual policies.
One more caution: be skeptical of anyone who pressures you to sign on the spot or quotes a premium without explaining how it could rise.
Ask directly whether the policy is guaranteed renewable — most are — and what rate increases the company has requested in your state.
Your state insurance department's website often lists them.
The hard truth is that waiting rarely helps.
Premiums rise with age, and a health diagnosis like diabetes or a prior stroke can make you uninsurable altogether. **Our take:** Long-term care insurance isn't right for everyone, and it's certainly not cheap.
But for retirees with $250,000 to $2 million in assets — enough to lose, not enough to self-insure comfortably — locking in coverage earlier, even a modest amount, often beats rolling the dice on a $100,000-a-year bill landing on your family.
Final Thoughts
Run the numbers, compare at least three carriers, and treat any quote as a starting point, not a promise.