pays for the help some senior citizens need to perform the basic functions of day-to-day living, Kassner explains. This can include the cost of a home attendant to monitor daily activities or assist with cooking, eating, dressing, bathing, or getting around the house. It might also provide for the cost of an assisted living center or a nursing home.
Experts say the forces of supply and demand will likely make the limited number of home attendants, nurses aides, and space in nursing homes much more expensive in the near future. The Department of Labor, for instance, estimates that the cost of a semiprivate room in a nursing home is projected to increase to $190,600 annually by 2030, up from $52,000 currently.
With escalating financial realities like that looming, it makes sense to consider coverage sooner rather than later. AHIP reports that the average premium for a good policy with inflation protection at age 50 costs $1,134 a year, compared with $2,346 a year at 65, and $7,572 a year at 79. MetLife, one of the largest insurers of such policies, breaks down annual rates this way: a five year benefit period, 5% compound inflation, home care plus rider, and return of premium rider will cost approximately $607 a year for a 30-year-old, approximately $742 for a 40-year-old, and approximately $881 for a 50-year-old.
“Most people in their 40s and 50s aren’t ready to start thinking about this sort of purchase,” says Kassner. “But the shame is to wait until your 60s, when the cost is higher, or come across a health condition that will disqualify you from coverage.” Still, MetLife financial adviser Lloyd Bowen says he sees people understanding the importance of coverage at an earlier age. “I’ve recently been working a lot with three groups: baby boomer parents who realize they are living long and want to maintain their independence, 30-year-olds who are taking out policies for their parents, and finally small business owners who can write premiums off.”
MEDICARE VS. LONG-TERM CARE
For many years, long-term coverage was not a concern for Joe Evering. He focused his attentions on career and family, working his way up to chief executive of the Harvard Street Neighborhood Health Center in Dorchester, Massachusetts, a health clinic not far from Boston. He watched his five kids grow up, move out, and establish families of their own. But three years ago at age 58, Evering had a revelation. Working at the clinic, he saw firsthand how older patients often found that Medicare wouldn’t cover the costs of nurse’s aides or in-home care. With his mother, Gladys, well into her 80s and diabetic, Evering began thinking about what might happen in the future. “I have three sisters [along with] myself who can pitch in should she need help, but if she needs long-term care, we wonder if it is going to have to come out of pocket,” he says.
Evering also began thinking about his children and how his own advancing age could affect them. The fact that he might