Cost of insurance for nursing home stays is soaring

You’ve hit middle age and suddenly you are worried about your future.

What happens if you can no longer take care of yourself and you need to move to a nursing home or hire an aide?

Medicare and health insurance don’t cover these things and the cost of long-term care in New York City is through the roof. Your assets could easily go down the tubes, along with your family’s financial security.

Time to purchase a long-term care policy, right? Good luck.

The long-term care insurance biz is undergoing a radical transformation that’s presenting tough consequences for consumers.

Premiums for new policies have surged between 30% to 50% over the last five years, according to the American Association for Long-Term Care Insurance, turning this product into an unaffordable luxury for many New Yorkers.

Today, a married couple who purchases policies at age 60 with a three-year benefit period and a $150 a day benefit are looking at an annual cost of more than $3,000.

“I am very concerned that people are not moving forward,” said elder care attorney Ronald Fatoollah of Ronald Fatoullah & Associates in New York. “It’s gotten more expensive.”

Insurers are raising rates on existing policies, too, and they are offering fewer options such as lifetime benefits.

According to insurance research group LIMRA, as many as 11 out of the top 20 insurance companies have pulled out of the business over the last five years. They will continue to honor existing policies.

As people live longer and hold on to their policies, insurance companies are finding it harder to turn a profit. At the same time, low interest rates have made it tough for insurers to grow their reserves to pay for future claims.

So what should you do? Considering what’s at stake, it’s still important to weigh your future risks against the high costs of buying a policy, experts say.

“I still encourage my clients to purchase it, if they can afford it,” said Marcie Roth, an elder law attorney with Singer, Block, Matles & Roth in Brooklyn.

The daily cost of a semi-private room in a nursing home in the New York area is $369, or a $135,000 a year, according to the MetLife Mature Market Institute. The cost of a home health aide is around $20 an hour.

There is a 40% chance that someone who has reached 65 will enter a nursing home where the average stay is two and a half years, according to stats compiled by Morningstar.

“The message is: consider this carefully and understand the potential of far reaching dissipation of assets if a family member r needs long-term care,” said Kathy Chazen, , a chartered life underwriter and certified long-term care specialist at National Finan- ncial Network in New York.

East Harlem resident Rebecca Eddy, 60, , is grateful that she and her husband Paul Feuerstein, 64, the CEO of a not-for-profit, , purchased long-term care policies with life- etime benefits back in 2005.

Recently, their insurance company, MetLife, raised their premiums by $200 each. They now pay $6,200 a year.

“It was sticker shock, back then,” said Eddy, whose company Eddy & Schein helps seniors navigate their finances. “We had to figure out how to come up with $6,000 a year.”

But the couple considered the potential massive costs down the road.

“If we pay that for 20 years, that is $120,000. To have round-the-clock care currently costs $160,000. So in less than a year, for one of us to have care, we recouped the costs for both of us,” Eddy said. d.

“It’s definitely still worth it,” she added. “One way or another a person has to plan for long-term care.”