ElderLaw News-The Estate Planning & Elder Law Firm, P.C. — MD, VA, DC
ElderLaw News
ElderLaw News is a weekly e-newsletter that brings you reports of legal developments and other trends of vital interest to seniors and their advocates. This newsletter is brought to you by The Estate Planning & Elder Law Firm, P.C., William S. Fralin, Esq., President., William S. Fralin, Esq., President.

Long-Term Care Costs in 2015

Long-term care insurance rates have risen for 2015.

Each January, the American Association for Long-Term Care Insurance evaluates prices from several companies in a representative state. This year the analysis was the result of looking at 10 companies’ rates in the state of Tennessee. The bad news is that rates have risen on average 9%; the good news is that the rates are not uniform across categories. Nor are the rates the same from all companies. For example, couples’ rates rose modestly, while single women’s rates rose the most, due to their expected greater longevity.

Here is what the association found for 2015. A 55-year old man in good health will pay, on average, $2,075 per year, which represents an increase of $310. Coverage includes $164,000 of initial benefits. A similarly-aged single woman, on average, will pay $2,411; however, her increase is only $104 from the previous year. Couples generally get a discount if they buy a joint policy. The theory is that they will have someone to provide some care at the beginning stage of incapacity. Their rate, if they were both age 60, would be $3,930 for $328,000 of initial coverage. Their increase had a modest $90 increase. If all of this sounds a little unfair to you, then you are in agreement with the National Women’s Law Center. Last year the center filed federal sex discrimination cases against four companies. At this moment, the cases are still pending.

The companies providing long-term care insurance have considered a way to reduce premiums. This would involve extending the deductible period in the plan. In other words, coverage would be delayed until a lapse of 2-3 years from the date of incapacity. Industry experts call this the ‘elimination period.’ However, insurers cannot act unilaterally. Significant changes like that must be approved by state regulatory agencies, which generally have allowed elimination periods of only 3 months. Shorter elimination periods came into effect to protect consumers who many not be alive at the end of the elimination period.

So, what is the best advice available now? First, the ideal time to purchases long-term care insurance is in one’s 50s. Coverage is at a relatively inexpensive rate, as compared to rates in one’s 60s or 70s. Also, there usually are less health issues at this age, making qualifying for coverage an easier process. Second, shop around for the best rate for the category in which you find yourself. Be aware that some insurance brokers only represent one company. If that is the case, make sure you check with several brokers, so that you can compare rates from several different providers.

(Ann Carrns, “Long-Term Care Insurance: Costs Are Up but Vary Widely,” The New York Times (Business section), Feb. 21, 2015, p. B5)


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