Healthcare is expensive, and getting worse.
Everyone knows about insurance premiums doubling and tripling since 2010. But that’s not the worst part.
Fidelity Workplace Consulting examined health spending, and found two points of pain that rise above the rest.
Long-term care is the big one that gives people the shivers, and for good reason. As U.S. News & World Report noted from the Fidelity report, on average nursing homes can eat up $80,000 per year. And home health aides are worse, typically costing $20 per hour, which would eat up more than $400,000 for round the clock care over the course of a year.
There are ways to lessen the burden, such as long-term care insurance, but providers are getting out of the business as cost soar.
Genworth, the biggest provider, just announced that it is not going to sell traditional individual policies and hybrid ones with annuities through brokers. While group policies and direct-sales will still be available, it is just one more contraction in an already shrinking market.
There are still ways to protect yourself. Jesse Slome, executive director of the American Association for Long-Term Care Insurance, favors a some-is-better-than-none approach. Limited long-term care policies, which have lower premiums and lower benefits, sold by companies such as New York Life and Mutual of Omaha, will at least pay some of your costs, he said.
The other trouble spot is more of a range than a number, it’s the years between age 50 and 64, just before Medicare takes over.
Fifty-four percent of people in this age group are worried about covering healthcare costs before Medicare kicks in, according to a recent survey from AARP, and with good reason.
This is when insurance premiums go up and also typically the time when chronic health conditions worsen and doctors pile on prescriptions as well as procedures. Medicare does a better job managing these costs than private-pay insurance.