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LTC and SSD: What's the future for New Jersey?

As the demographics of New Jersey and the rest of the country continue to tip the scales in favor of an older population there is a growing level of concern about how the needs of that aging body of people are going to be met.

With age often comes disability. And with longer life spans comes an increased risk of long-term disability. Social Security disability has been a bulwark of protection since it was started in the last century. But as we have all been hearing in recent years, there are concerns that Social Security may be on the disabled list itself for lack of funding.

Perhaps adding to the concern is news that New Jersey providers of private long-term care insurance, often offered through employers, have been given clearance to jack up their rates. In the past year, the state's Department of Banking and Insurance has given thumbs up for increases ranging from 15 to 45 percent on some 16 plans. They've been steadily increasing since 2009.

If that isn't something to fret over, there's the fact that insurers are getting stricter about who they allow on their plans and capping the benefits customers can receive. "The Record" reported recently about one 75-year-old widow in Teaneck who saw her rates for long-term care insurance rise by 45 percent this past spring.

Living on a fixed income, this woman is also still paying a mortgage. She had seen the LTC protection she had gotten through her former employer as a safety net in case she ever became disabled. In the face of the rate hike, she opted for lower benefits and a scaled back premium. Now she worries her future security is in jeopardy.

Officials for the long-term care industry say the rate hikes are necessary because they made some bad assumptions when getting into the market. They didn't anticipate that so many people with chronic illnesses would see life extended due to improvements in medical treatments, so insurer's costs have gone up.

What the future holds is unclear. Social Security is there for those who need it now. Whether it can be sustained is an issue. Meantime, long-term care analysts predict LTC costs will continue to rise. Individuals faced with worries about their long-term care outlook may find it helpful to consult with counsel with experience in this area of life.

Source: The Record, "N.J. rate hikes bring new worries about long-term care insurance," Colleen Diskin, July 30, 2012

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