[…] 44% of respondents said that they didn’t have long term care because it was too expensive, but overall, respondents greatly over-estimated the cost of a long term care policy. The average annual premium in 2009 was $2207, but respondents in the Prudential study estimated it to be $3900. This misperception could be a factor keeping people from purchasing long term care insurance, despite their concerns about their ability to pay for future long term care needs.
[…] But if it does pass, hopefully all of the nuances of it will be thoroughly explained to eligible Medicaid enrollees before they make the switch away from the traditional program. The program would be voluntary, and does include a provision to allow participants to withdraw with 30 days notice provided to the state. It may end up being a good fit for some seniors, but if mis-handled (for example, by encouraging seniors to join the program without adequate explanation), it could also be an erosion of a vital safety net for cash-strapped seniors.
[…] My guess is that over the next decade or so, we’re going to see discussions about long term care that will look similar to what we’ve seen in the last couple years regarding health insurance. The rate hikes we saw last year in the long term care insurance industry were a sign that long term care is becoming more expensive than ever, and as the population ages, there will be a steadily increasing demand for long term care services. Other nations are starting to address the subject in their legislative bodies, and although the US tends to prefer private market solutions, it remains to be seen whether government programs like CLASS will become more widespread and robust as time goes by.
[…] The possible instability in Medicaid only serves to highlight the importance of coming up with a strategy – preferably while still young and working – to pay for future long term care services. Whether or not Medicaid will still be able to provide its current level of benefits 20 years from now is unknown. It’s more important than ever to start saving now, plan for the purchase of long term care insurance, or figure out some other way of covering potential future long term care costs.