Long-Term Care Costs Rise at Faster Pace, MetLife Says
(Corrects to show Limra is based in Windsor, Connecticut, in fifth paragraph of story published Oct. 25.)
U.S. long-term health-care costs rose as much as 5.6 percent this year, led by assisted-living expenses, and are climbing at a steeper rate during a weak economy, MetLife Inc. (MET) said.
The average cost for assisted living rose 5.6 percent to $41,724 a year, compared with a 5.2 percent increase last year, New York-based MetLife, the largest U.S. life insurer, said today in a report. The rate for a private nursing-home room increased 4.4 percent to $87,235 a year and adult day services climbed 4.5 percent to $70 a day. Home health-aide service was unchanged at $21 an hour, MetLife said.
“This year’s increases are greater than previous years,” Sandra Timmermann, director of the MetLife Mature Market Institute, said in the statement. “The state of the economy, combined with rising health-care and energy costs, are having a significant impact on long-term care rates.” The institute is a research arm of MetLife that focuses on aging.
MetLife stopped accepting applications for long-term care insurance in 2010, citing “financial challenges” in the industry. Guardian Life Insurance Co. of America said it would stop writing the policies by the end of this year. Allianz SE (ALV), based in Munich, has sold no new long-term policies since 2009.
Long-term care policies help pay for home-health aides and assisted-living facilities. Approximately 7 million adults own long-term care insurance, said Catherine Theroux, a spokeswoman for Windsor, Connecticut-based Limra, a life insurance and management consulting firm.
“Long-term care rates continue to outpace the medical inflation rate,” Timmermann said.
Medicaid helps cover long-term medical services and support expenses for low-income Americans while Medicare covers only short-term nursing and home health services, according to the Henry J. Kaiser Family Foundation. The portion of the 2010 federal health-care overhaul designed to provide long-term care insurance was suspended earlier this month.
To contact the reporter on this story: Maryellen Tighe in New York at mtighe6@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
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