Planning for your long-term care
A home health care worker combs the hair of an elderly man after shaving him in his home in Miami, Fla.
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Bob Moon: A lot of Americans don't even know what long-term care insurance is let alone own a policy for themselves. That's a big reason that as of today, MetLife is no longer selling it. Long-term care insurance covers the kind of help you might need as you get older -- help feeding yourself, bathing, cooking. It can cover a full-blown nursing home or just a home care aide. But the policies are getting more expensive, for the insurance companies still selling them, as Gregory Warner reports from the Marketplace Health Desk at WHYY in Philadelphia.
Gregory Warner: For the last five or six years, Ellen Fillion has been paying for her mom's nursing home, using the money she'd saved up for her own retirement.
Ellen is 66, her mom is 97.
Ellen Fillion: She is in a very very nice nursing home. But, at $6,000 a month, your money goes pretty fast.
Ellen didn't want the same thing to happen to her kids. So she shopped around for long-term care insurance for herself and her husband that would pay for a nursing home if the time came. Then she got the price tag -- over a thousand a month.
Fillion: We just didn't think that we could afford the long-term care insurance. Now, everybody doesn't end up in a nursing home. The ideal is that you go out like the incandescent light bulb. The light burns until it goes out.
Warner: So, you and your husband are just hoping to kind of blink out one day.
Fillion: Yes. That's the plan!
Anne Tumlinson with the consulting firm Avalere Health is an expert in this kind of insurance, and in these kind of excuses.
Anne Tumlinson: We are living in denial. Yes.
Tumlinson has trouble explaining to people what she does for a living. "Long-term care insurance?" they say. When the time comes, most people sell the house to pay for the nursing home.
Tumlinson: And, the whole entire assisted living industry has been fueled, not by insurance payments, but by home equity. But the problem is you can run out of money. You end up on Medicaid, and Medicaid doesn't have many choices.
Or your kids start picking up the slack. Even as some private insurers are getting out of the long-term care market, the federal government is stepping in. As soon as 2013, working adults could have premiums deducted from their paychecks, automatically, like a payroll tax. You'd be allowed to opt out of the program, but if you don't, you're entitled to about $50 a day in long-term care. Also, your employer has to decide whether to participate in the government program.
Claude Thau: Employers are more and more impacted by employee's family members needing care.
Claude Thau is a consultant to the industry. He says the government plan could end up breathing life into the private market, by encouraging employers to bring up the subject with employees. What this industry needs most of all, he says, is for lots of people to just start planning for their own ending.
In Philadelphia, I'm Gregory Warner for Marketplace.