Caring for the elderly is expensive. Nursing home fees could be $8,000 a month. Home care, while cheaper, may still ring in around $4,000 a month — almost $50,000 a year.
These long-term care expenses add up, especially as we live longer, and state lawmakers are looking at ways to get Minnesotans to cover the costs. One solution is insurance for long-term care.
Deb Newman owns a Richfield-based insurance agency focused exclusively on these policies. She is testifying Wednesday morning in front of the House Committee on Aging and Long-Term Care, and she spoke with MPR's Cathy Wurzer in-studio before meeting with lawmakers.
Newman says more and more people are choosing long-term care insurance to protect themselves from the potential costs of care down the road. Twenty years ago, long-term care insurance covered only 2 percent of the costs of care in the United States. Now, she says, that figure is closer to 12 percent.
4 things to consider when choosing long-term care insurance
1. How much will your monthly benefit cover?
A nursing home might cost $7,000 per month. But home care could be $4,000 a month, Newman says. You choose how much you want to insure.
2. How long do you want that benefit to last?
You can choose how long the policy will pay for care once it kicks in. That could be anywhere from two to 10 years.
3. How high will the deductible be?
In long-term care insurance, the deductible is measured in days, Newman says. This determines how long you will have to pay for care before the benefit kicks in.
4. Do you want the value of your policy to grow with inflation?
If you're buying a policy today, but you won't use it for 30-40 years, you'll want its value to increase with inflation. You choose how much you'd like that yearly increase to be, typically 1-3 percent. When this inflation is added on to a policy, premiums typically increase significantly.