Aug 27,2015


A recent article in Yahoo Finance[1] covered the stories of two families with senior parents confronted with the rising costs of long term care. One family spent nearly $300k even with long term care insurance (LTCI) which wiped out the parent’s savings in two years instead of the expected ten years. The other family chose to move the elderly parent back into their own home and used LTCI to pay for home health aides.

Both decisions were not easy ones to make. Although the family that moved the parent back to their home had a relatively “happier ending’ than the family that did not, in that the parent was far happier at home and her health progressed instead of getting worse as the other’s family’s parent did, these decisions are being made every day by middle class families who have to choose between relocating a parent to an assisted living facility or nursing home; or either move in with them or have the parent move into their own homes. These parents have too much money to apply for Medicaid but not enough to cover the typical 3 years of care that most of these facilities require as a condition for entry.

LTCI premiums are out of reach for a lot of people. Premiums average $1k-$4k per year depending on the age and health. And even those with LTCI have been grappling with the annual increase of payments by as much as 25% in some states. Due to the increase in the life expectancies of many of our seniors, the insurance companies are finding that they are losing money by paying out more.

It is more important now than ever before to establish a plan on how to pay for long term care costs. Consult an elder planning attorney to discuss ways on how to effectively use both private and public resources to pay for such care in the event you or your loved one may need it. With proper planning, you may be able to minimize the devastating impact of these long term care costs.

[1] Yahoo Finance July 2015 – “Families Face tough decisions as cost of elder care soars”

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