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Published: Jan 11th, 2017

NBC Today Show: How to Pay for Long Term Care

NBC Today Show: How to Pay for Long Term Care
Article Updated:January 22nd, 2019

Jean Chatzky, the financial editor for NBC's "Today Show," appeared with Matt Lauer when he was still hosting the show to discuss the need for consumers to plan in advance for the high costs of long-term care. 

The issue of long-term care has been a big media topic due to an aging America. Because of longevity, more and more people require extended health care due to illness, accidents, or the impact of aging. 

Cost of Long-Term Care is Expensive

Matt Lauer pointed out that medical costs, especially unexpected ones, can add up. He says most people want to have a healthy retirement, but there's a big wild card when it comes to aging and long-term care costs. Consumers need to prepare families and finances for the financial costs and burdens that come with getting older.

“A 65-year-old couple will need an estimated $260,000 to pay for unreimbursed medical expenses through retirement — and that doesn't include Long-Term Care, according to Fidelity Investments. If you want to have a healthy retirement, there's a big wild card you need to be prepared for health care expenses.”

Matt Lauer

The cost of care today is even higher. You can find the current cost of long-term care services where you live by using the LTC NEWS Cost of Care Calculator by clicking here.

Lauer pointed out these costs do not pay for long-term care costs, something he reported that 7 in 10 people will need at some point.

“Long-Term Care will cost anywhere from $44,000 to $96,000 a year depending on the type of care you require but you need a plan to pay for that.” 

Jean Chatzky, Financial Editor for NBC’s “Today Show”

LTC Insurance Can Be the Solution

Traditional Long-Term Care Insurance will pay for all levels of care, at home or in a facility. Chatzky reports the rate for a 60-year-old couple in normal health is about $2,100 a year for a mid-range policy, according to the American Association for Long-Term Care Insurance (AALTCI). The AALTCI is a national advocacy group to educate Americans on Long-Term Care Planning.

Premiums on these policies may be tax-deductible. The AALTCI also says most states offer partnership policies that provide additional dollar-for-dollar asset protection.

Chatzky says that if you've been saving for years and are looking to leave something to your kids, Long-Term Care Insurance is a way to make sure that all of your money doesn't go to pay for health care.

Hybrid policies also exist. These are life insurance policies or annuities with a long-term care benefit. These policies allow a consumer to tap into the policy to pay for long-term care, reducing the death benefit.

If you never require long-term care, your family is still able to collect on the death benefit or the cash value of the annuity. While the Today Show reported that these plans do not have inflation options, the better insurance companies do have inflation options on these hybrid policies. 

Experts suggest speaking with a specialist who can explain the options available.

Lauer asked Chatzky when is the best time to start shopping for long-term care solutions.

 “You want to start shopping at about age 50 and you want to ramp up your shopping very quickly.” 

Jean Chatzky

She explained premiums after age 60 are higher but health conditions start to set in which could make premiums high or make a person uninsurable.

“You want an “A” rated insurer and shop around (the top companies).”

Jean Chatzky

Find Expert Help

She also recommends working with a Long-Tern Care Insurance specialist and not to wait too long.

Long-Term Care specialists indicate that premiums are based not only on the benefits you purchase but also based on the application age you get the policy and your health at the time of application.

“We will end the year with some seven million Americans who have traditional Long-Term Care Insurance protection and another million who have a linked-benefit (hybrid) product that provides some LTC protection."

 Jesse Slome, executive director of the AALTCI.

There are a number of online resources to learn more about long-term care planning:

Long Term Care News: includes news stories on health and Long-Term Care Planning. It also has videos and website links as well: www.ltcnews.com.

US Department of Health and Human Services LTC site: www.longtermcare.acl.gov

The National Institute on Aging: www.nihseniorhealth.gov

The American Association for Long-Term Care Insurance: www.aaltci.org