Women Face Huge Increases in Long-Term Care Insurance Costs

Photo (cc) by Hammer51012

There’s still a “pay gap” between the sexes – women make about 81 percent of what men do, according to the U.S. Bureau of Labor Statistics – and now you can expect to see a wide “spend gap” for insurance.

Specifically, long-term care insurance. These policies cover what your health insurance seldom does: your costs when you enter a nursing home or assisted living facility – or even if you can stay at home but need help with the basics there.

Some insurers are now charging women much more for new policies than they charge for men. It’s called “differential pricing,” and it’s been implemented by major insurer Genworth in 31 states. Most long-term care insurers are expected to follow suit.

“Under differential pricing, single women can expect to pay 25 percent to 40 percent more for a policy than a single man would for the same policy,” Reuters reported. The news service partnered with ValuePenguin, a data-mining company, to study the issue. One example of its findings:

A 60-year-old man or woman buying three years of $6,000-a-month coverage in Illinois — which doesn’t have gender-based pricing now — would pay $2,927 a year … . In Iowa, which has differential pricing, the man would pay $2,674, but the woman would pay $3,647.

The rationale for differential pricing is that women live longer than men and are more likely to use the coverage.

Here’s what women – and men, too – can do to save money with this notoriously complicated kind of insurance:

1. Decide if you even want it – or need it

More than 10 million Americans have long-term care policies, says the American Association of Long-Term Care Insurance. Who really needs this coverage?

As The New York Times put it eloquently:

Wealthy people can pay for their own care. And Medicaid covers long-term care for people with no assets, though they may not be able to get the care they want where they want it. Everyone else either has to save for the possibility that they’ll need care for years or buy insurance to cover the cost.

Long-term care insurance used to be more affordable. But many insurers underestimated how much providing the coverage would actually cost them. Some have gotten out of the business, and others are raising rates by 50 percent or more. Headlines like this one, from February, are becoming more common: “CalPERS plans 85% rate hike for long-term care insurance.”

That’s one reason why Forbes wrote in March, “If you are risk-averse, you will stay away from these policies.”

The Women’s Institute for Financial Education – WIFE for short – recommends:

If your net worth is between $75,000 and $3 million, long-term care insurance can help protect your estate. If your net worth is below $75,000, Medicaid (government assistance) will pay for your care as soon as your assets are depleted. If your net worth is over $3 million, it might be cheaper just to pay for the care yourself.

2. Lock in now

If you’re a woman and you’re determined to look into a policy, the experts advise you to do so right now – before more insurers adopt differential pricing. So where can you find an easy list of comparison prices? Nowhere.

“There is no single directory of state plans and prices to find out if you’re too late,” Reuters says. “If you are in the market for a plan, just start getting quotes. Right now it is a patchwork.”

3. Up the deductible, lower the benefits

Deductibles for long-term policies are very different from those for your car or health insurance. For starters, they’re called “waiting periods” or “elimination periods.” They work like this: You have to wait, say, 60 days for your benefits to begin.

“So if your policy covers $150 a day for in-home care, and you have a 60-day waiting period, you will typically owe the first $9,000 — 60 times $150 a day — before the policy kicks in,” explains The New York Times.

You can always raise the waiting period to 90 or 100 days and save on your premiums. You can also limit some of the benefits. “Instead of paying for permanent benefits, consider buying coverage for five years,” Reuters recommends. “That would cover most typical long-term care needs.”

4. Apply with your spouse

If you’re married or in a same-sex domestic partnership, you can apply together, Reuters says. “A plan like that would let you split the benefits any way you needed them but would cost less than two single plans.”

As you can see, this is complicated, and the best advice is to consult an insurance agent you trust and do your homework. For more details on this topic, consult “10 Tips to Find Long-Term Care Insurance.”

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
12 Easy Ways To Make Make Money Online Without Leaving Home
12 Easy Ways To Make Make Money Online Without Leaving Home

If you’re hanging around the house a lot these days — and who isn’t? — use your time to make some extra cash.

How Much of My Social Security Benefit Can My Ex Take From Me?
How Much of My Social Security Benefit Can My Ex Take From Me?

A man wonders if his ex-wife will siphon away his Social Security benefit.

How to Get Rid of 6 Hard-to-Sell Things
How to Get Rid of 6 Hard-to-Sell Things

Find out where to sell, donate or recycle items — and feel good about it.

7 Surprising Things That Damage Your Credit Score
7 Surprising Things That Damage Your Credit Score

A seemingly small stumble can cause your credit score to plummet.

12 Ways to Maximize Your Social Security Checks
12 Ways to Maximize Your Social Security Checks

You may be eligible for more retirement income than you realize.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

Am I Eligible for My Mother’s Social Security Benefit?
Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

6 Legal Documents Retirees Need — but Don’t Have
6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

Do This in the Car If You Want to Avoid COVID-19
Do This in the Car If You Want to Avoid COVID-19

It takes just seconds to take this simple preventive measure.

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.