Here is the answer I gave:

“This is a very good question since the cost of long-term care is constantly rising. This makes planning ahead for long-term care costs essential when you are considering long-term care insurance.

The most common method used to assure adequate funds will be available in the future when the care is actually needed is to select an appropriate daily benefit that is currently in line with the costs of care in the area where you intend to retire. Then if you add a sufficient inflation benefit that will keep pace with inflationary costs as you age, the benefits will automatically increase each year until they are needed when you are older and require care.

When using this method it is good to decide how much of the cost of long-term care that you are personally willing to contribute out of your own funds or income first. If you want your insurance to cover all of the potential cost of care then you should most likely select a daily benefit that is line with the cost of nursing facility care in the area where you intend to retire as that will often be the most expensive care that you may receive.

However, if you plan instead to funnel some of your own unused funds or income to cover a portion of your care, decide how much you feel is practical for you to be able to do so and select a daily benefit that will allow for this coinsurance on your part. If you choose this method, please keep in mind that as the cost of care goes up due to inflation more funds will be needed to close the gap between what your insurance covers and what the cost of care actually is.

When you have the daily benefit set at a level that you feel is right for your circumstances and risk tolerance, then apply an automatic inflation benefit in the policy that is appropriate for your age. By following this plan your long-term care insurance policy should automatically keep your benefits up-to-date as you age and there will sufficient funds available for care whenever the policy is activated in the future.”

You can view more questions that I have been asked on Caring.com by clicking here.

1. Leverage Your Good Health: Insurers will require you meet certain health qualifications to obtain coverage. Discounts are provided to those in good health and 62 percent of applicants between ages 40-49 qualified in 2009. The percentage drops to 46% for ages 50-59 and only 38% for ages 60-69. Once obtained, the preferred health discount is not lost when your health changes.

2. Right-Size Your Coverage: Some long-term care insurance is always better than none. Factor in other sources of income such as Social Security, pension and 401k plans that can pay costs and allow you to add money-saving options such as a 90-day deductible (Elimination Period) or consider a limited-pay plan with a Shared Care option that allows two spouses to share a common benefit pool.

3. Compare Coverage: Each insurer establishes it’s own rates, health standards and available discounts. As a result, virtually equal protection from two highly-rated insurers can vary by between 30 and 80 percent. Ask your insurance professional if they have access to policies from just one or from multiple insurers.

For more information, visit the Association’s Consumer Information Center: http://www.aaltci.org/long-term-care-insurance/

That’s the conclusion of a a report this week from Boston College’s Center of Retirement Research. Here are some of their conclusions:

“First, those in good health can expect to live significantly longer,” the report said. “At age 80, people in healthy households have a remaining life expectancy that is 29% longer than people in unhealthy households, and, therefore, are at risk of incurring health care costs over more years.”

Second, the report said that many of those currently free of any chronic disease will succumb to one or more such diseases. In running a simulation, Boston College found that individuals who are free of any chronic diseases at age 80 can expect to spend one-third of their remaining life suffering from one or more such diseases.

Third, the report said people in healthy households face a higher lifetime risk of requiring nursing-home care than those who are unhealthy. That reflects their greater risk of surviving to advanced old age, when the need for such care is highest.

Also, those who are healthy now but delay buying Medigap or long-term-care insurance could face higher premiums later on, according to Malcom Cheung, a vice president in Prudential’s long-term-care division.

“Those currently in good health would be unwise to infer that they will continue to enjoy lower than average health-care costs,” according the Boston College report. “The reality is that even the currently healthy can expect to eventually suffer from one or more chronic diseases, which often results in high out-of-pocket and long-term-care costs.”

You can read the rest of the report here.

A recent article in McKnight’s Long-Term Care News on this subject revealed these details:

“Without an effective treatment, the cumulative costs of caring for patients with Alzheimer’s disease in the United States could top $20 trillion over the next 40 years, according to a new report from the Alzheimer’s Association.

By the year 2050, the number of people with Alzheimer’s disease will climb from roughly 5.1 million today to an estimated 13.5 million, the report released this week said. If that happens, annual costs would also rise—from $172 billion to more than $1 trillion. Costs to Medicare will jump by more than 600% to $627 billion per year. That compares to $88 billion today. Meanwhile, Medicaid costs will soar to $178 billion, up from the current $34 billion, according to the report.”

You can read the entire article here.

The cost of insuring long-term care is constantly rising and so it is very common to see insurers raise premium rates for new applicants every 2 - 3 years. This is not a a serious problem as all new applicants then know what the costs will be going in.

What consumers want to avoid is companies that have a history of regular rate increases on current policyholders. This indicates that the insurer has no other way to increase revenue than to lay it on the backs of their current clients. That can be a bad sign for future rate stability with that particular insurer.

The major long-term care insurers have the ability to increase revenue from new sales of their products and that helps keep current policy rates stable.

The fact that insuers often raise new applicant’s premium rates is another reason why procrastination in buying long-term care insurance is an unprofitable decision. So while the lower rates are in effect, I encourage everyone who has not yet gotten a policy to do so if possible, because these lower rates will not be seen again.

The new version has just been released and is available for download. Its a good practice to use this guide to help stay up with the rising cost of long-term care in your particular area since these costs can vary considerably depending on where you live in the country.

You can download a copy here: Genworth 2010 Cost of Care Guide

But if you also add the uncertainty of the viability of government programs like Medicare and Medicaid to be there if needed to cover a portion of health costs, the picture gets even worse.

A recent study by the Employee Benefits Research Institute has taken a good look at the subject and here is an excerpt from their report: ““The current set of assumptions - that Mom and Dad were OK because of Medicare - may not be the case” for future retirees. “When you add in the potential for nursing home costs, for just about every demographic group close to retirement, the chances of having adequate retirement savings was hopeless- unless they had long-term care insurance.”

“If nothing else,” says VanDerhei, “I’d love people to realize that even if Medicare continued [to provide the same level of benefits it does today], it’s never going to cover you for nursing home care… I see too many retirees who think they’re all set, and then one goes into a nursing home. And they next thing you know, there goes all the money.””

You can read the entire report here.

Under these circumstances, it is very difficult to make an educated decision after considering all of the options available. There simply isn’t enough time for that.

So advance effort is best to identify the facilities in your area that appear to offer quality care at the price that you can afford. But what criteria should you use to compare nursing facilities?

Here is a great article from the New York Times that gives some very specific recommendations for consideration: Stressful But Vital - Picking A Nursing Home.

Here is some of what she said: “You should also come up with a plan for long-term care, should you need it. This is particularly important for folks in their 50s and 60s. Long-term care is breathtakingly expensive and Medicare does not cover this. So consider long-term care insurance. This is something you need to buy when you’re in good health. Now, the insurance isn’t cheap, but having to pay out of pocket for these costs can bankrupt a family. So you need to know how bills could be covered one way or another.”

You can view the rest of the interview by clicking here.

The last thing that anyone would want is for their loved ones to languish in a nursing facility where substandard care is being administered.

But which nursing facilities are best? And how do you get an objective opinion on local nursing facilities?

One way is to consult the 2010 America’s Best Nursing Homes ranking recently released by the U. S. News Media Group. You can access that report here.