Long-term scare: The cost of insurance that covers nursing home stays is soaring - New York Daily News

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 purchase 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, the association said.

"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 the business over the last five years, though they will continue to honor existing policies. The latest to go: Prudential which announced its exit in July.

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.

And the odds are high that you'll need help: There is a 40% chance that someone who has reached 65 will enter a nursing home where the average stay is two and half years, according to stats compiled by Morningstar.