Nursing Home Care Costs & Inflation

Long term care (LTC) expenses in the United States continue to escalate at a rate much faster than inflation in basic necessities such as food or clothing. Year after year, the cost of nursing home care in the country keeps on rising. At present, the annual cost ranges between US$50,000 to US$100,000. In the state of New York, the average nursing home cost reaches to US$90,000 per year.

According to LTC experts, nursing home care costs are likely to double in 15 years if the present growth rate in nursing home costs persists.


Given the limitations of Medicare, Medicare, and traditional health insurance plans, the option for most people is long-term care insurance (LTCI). As a means of protection, there's a specific clause in long term care plans called "inflation protection." It is a type of benefit that increases the daily benefit amount over time to keep pace with inflation and the rising cost of LTC expenditures.

Although you are not required to buy inflation protection, it is a very essential protection for policyholders who might not require long term care for so many years. One of the main features of inflation protection is that it will increase the premium on a policy. Since the costs of long term care services continue to get costly, it would be wise to consider the protection offered by this benefit. An LTC policy without an inflation protection may be of little value 10 to 20 years from the time of purchase.

Indeed, long-term care insurance is a valuable means of protecting your financial independence against the event of costly long-term care in the future. Financial experts today recommend LTCI as a key element of any retirement plans. If you plan to purchase a policy, start by requesting long term care quotes from different reputable providers then compare them to know which one best suits your preferences.

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