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Long Term Care Insurance Premiums on the Rise

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Large increase in rate requests for long term care insurance are increasing the chances that the next wave of retirees may not be able to afford coverage for options such as nursing homes, assisted living, and related health services. Since the period of 2012, the Massachusetts Division of Insurance has regularly approved the premium increases of around 10 percent for long term care insurance, which was introduced in the 1980s. The goal was to make the insurance an option to counteract the high costs of nursing care. However, regulators are now reviewing requests from some companies to double their rates, which might increase premiums by thousands of dollars every year.

Many of these increases are coming as retirees are making their way towards needing care more than ever. This forces them to have to make the choice of whether to reduce their benefits, devote more of their income to insurance, or completely drop their coverage. AARP is already starting to warn consumers that they need to make sure that they will be able to afford the rising premiums before they invest in long term policies. Many older individuals have already claimed that if they knew that long term insurance coverage was going to become so costly, they wouldn’t have invested in it years ago. As much as they need the coverage and the long term care, many are finding that it’s too much of a struggle to be able to meet the costs of the insurance premiums without putting themselves into debt or going further into debt as the years progress. The debt is creating a burden for both themselves and their families as the premiums continue to rise; an element that is often not thought of during the insurance sign up process.

Throughout the country, insurers that offer long term care insurance coverage have asked state regulators for double digit rate increases over the past few years. The average cost of a policy has jumped 80 percent for 55 year old couple to more than $3,500 annually last year from less than $2,000 in 2007, based on information from industry statistics. People who are interested in investing in long term care insurance need to be aware that they may experience additional rate increases as the years progress.

Long term care insurance was created to help fill in the gap between Medicare and Medicaid, as well as help to cover the costs of long term care. However, the costs of long term care are also increasing as the years continue to pass. As the costs of healthcare itself continues to rise, it puts a higher demand on the prices for insurance coverage to rise as well, but insurers can only meet these demands by trying to raise premiums to ensure that they still make profits from the amount of claimants that they have. These are just some of the factors which contribute to the high cost and increase in cost associated with long term care insurance.