This article reviews the latest survey of the market. It finds that premiums are rising (no surprise) and that more and more of those over age 50 aren’t purchasing because they believe the premiums are too high. But this tells only part of the picture. Many people are buying the hybrid annuities or life insurance policies to cover their long-term care expenses.
The average annual premium was $2,727 in 2015, an increase of 42% from 2005 and of 19% from 2010. Of those surveyed who were over 50 years old, 55% said they opted not to purchase coverage because it was too expensive.
Long-term care insurance is designed to fill a gap in retirees’ medical safety net. Roughly 40% of Americans over 65 spend at least a brief period in a nursing home, according to one Morningstar report, and others will need at-home assistance. But Medicare covers nursing care under only a few, relatively narrow circumstances. Medicaid will cover nursing care, but only for recipients who have exhausted their other financial assets.