7/26/2011

Facing Long Term Care Costs with Private Insurance

If there is truth to the projection of some health care specialists that come 2030 there will be a huge reduction of nursing home residents who will spend down their assets so Medicaid will shoulder them, then it appears long term care costs should not stand as a threat. 

Cost of care in the country has been the issue of financial advisers and healthcare specialists among baby boomers since news broke that the figures of home care and long term care (LTC) facilities are going to double in 2026 and quadruple in 2030.

This shouldn't be the case had all baby boomers prepared ahead for their health care needs. Unfortunately, out of the predicted 79 million elderly folks who will require care very soon, only 10 million have clinched long term care insurance (LTCI) policies. Many of them are still in denial of the possibility of becoming disabled even though it has been foreboded that 26 million of them will come down to a serious condition and will require 24/7 monitoring in a nursing home. 

Due to the very small number of insured people, the government can't help but feel the weight of the LTC industry's problem. Last year, Medicaid shouldered 49% of the nationwide LTC expenses and if this goes any higher this year and in the succeeding years, government agencies fear that it is only going to be a matter of a few more years before this federally-funded health program dries up completely.

It's good to know that there are still people in the LTC industry who can manage to make positive predictions such as Medicaid getting to save $28 billion in 2030 as private insurance owners increase by 29%.

Beating Long Term Care Costs

Just like the prices of food, petroleum and housing, the rising cost of care should not be viewed as a new item in inflation. 

As a matter of fact, it has been like this since time immemorial only magnified nowadays as financial analysts have predicted a significant increase in the rates of LTC facilities in 2026 and 2030. Had it not been mentioned that rates of LTC facilities would go up twofold and fourfold, the government and its people wouldn't be fussing over it.

If you look at the issue closely though, you will realize the advantage in telling people about the speedy and continuous increase in the cost of care is that you get them to act and plan. The downside is turning those individuals without a single plan for their future into pessimists.

Private insurance will be very useful someday when your body has turned frail and incapable of doing the activities of daily living. If you will constantly think of the annual premium as a total waste of money, you will never get to plan your health care.

Your retirement plan should be inclusive of your health care needs and long term care costs increase by the year so while you're 20 or even 30 years away from the retirement age, see to it that you are taking the necessary measures to secure your future and that of your family. 

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