Navigating Rising Long-Term Care Costs: Essential Insights for Freddie Mac Employees

Healthcare Provider Update: Freddie Mac offers a comprehensive benefits package that includes flexible healthcare plans such as POS, HMO, and high-deductible options with HSAs. Employees also receive dental, vision, life, and disability insurance, along with access to an on-site wellness center and fitness facilities. Additional perks include student loan repayment assistance, adoption and fertility benefits, legal services, commuter subsidies, and generous paid time off. The company contributes to 401(k) plans with matching and automatic contributions, and supports employee well-being through EAPs and backup care services 1. Freddie Mac Healthcare costs in the United States are projected to continue rising through 2026, with insurers proposing significant premium increases for Affordable Care Act (ACA) plans. A recent analysis found that ACA insurers are seeking a median premium increase of 15% for 2026, marking the largest hike since 2018. This surge is attributed to factors such as the anticipated expiration of enhanced premium tax credits, rising medical costsincluding expensive medications and increased hospital staysand a shift in the risk pool towards higher-cost enrollees. Without the renewal of enhanced subsidies, out-of-pocket premiums for ACA marketplace enrollees could increase by more than 75% on average. Click here to learn more

It is crucial for Freddie Mac employees to actively prepare for the unexpected expenses that come with long-term care in order to guarantee their financial future,' says Patrick Ray, from The Retirement Group at Wealth Enhancement Group.

Managing long-term care is not merely a question of awareness: it means action,' says Michael Corgiat of The Retirement Group, a division of Wealth Enhancement Group.

In this article we will discuss:

Financial Planning for Long-Term Care: In this article, we will look at the costs and ways of paying for long-term care, and why it is a problem for Freddie Mac employees and how strategies like insurance and savings can help.

Insurance Options and Benefits: In this paper, the different types of insurance plans provided to employees are evaluated, including the traditional and hybrid plans, and the employer-provided plans, and their implications for the future financial situation.

Family and Personal Impacts: In this paper, the emotional and financial impacts on families, the different ways of handling potential long-term care situations, and the importance of planning for these scenarios are discussed. As a Freddie Mac employee nearing retirement, long-term care must be addressed. The government estimates that 70 percent of older adults will need some form of long-term help. Nevertheless, a Kaiser Family Foundation survey reports that many have not planned for this.

The Cost of Long-Term Care

This is important for the employees of Freddie Mac to know the financial consequences of long-term care. The Genworth Cost of Care survey reveals that the cost of a year in a private room nursing home is more than $100,000 and home health aides are more than $60,000 a year. Since Medicare does not pay for these expenses, alternatives like personal savings, hybrid insurance policies, annuities with long-term care features, traditional insurance or Medicaid (after the assets are exhausted) have to be considered.

Family Impact: The effects of unprepared long-term care can be financially and emotionally devastating to family stability. This paper provides practical suggestions for Freddie Mac employees on how to manage these possible costs.

Conventional Insurance for Long-Term Care: For the workforce of Freddie Mac, long-term care insurance can be obtained only when one is fit, applies early and can afford to pay the premiums. However, only a small percentage of those who are eligible take this insurance.

The Price of Long-Term Health Insurance: Purchasing long-term care insurance at forty or early fifty can lead to lower premiums. With age, not only do the premiums rise but the chance of being turned down for coverage also rises.

Ways to Reduce Costs: According to the findings of the study, Freddie Mac employees may have to turn to purchasing insurance at a young age, buying policies that have the joint benefit for couples or choosing a longer waiting period to buy the policy at a lower price. Making annual premium payments also saves on costs.

Benefits for Freddie Mac Employees: Some employers may provide long-term care insurance as a form of benefit and such insurance is portable upon leaving the employment.

Hybrid Insurance Policies: Long-term care insurance has become popular and there is a shift toward hybrid policies that combine life insurance with long-term care benefits. These are accessible but are generally more expensive than standalone policies.

Long-Term Care Rider Annuities: A type of annuity that includes a long-term care rider may be more suitable for some retirees in that they make payments regardless of long-term care needs and tend to have less stringent health requirements.

Independent Insurance: High net worth retirees may decide to self-insure and therefore need to have a sufficiently large balance sheet to be able to pay for the potential long-term care expenses. It is important for Freddie Mac employees to consider the tax consequences of using their retirement funds for these expenses.

Health Savings Accounts (HSAs): HSAs are a form of tax-preferred savings vehicle for long-term care expenses that can be used by Freddie Mac employees with HDHPs. These accounts are funded with pre-tax dollars, and can be used to save for medical expenses without incurring taxes on growth or distributions.

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Family Guidance: As the example of Nancy Yung and her family shows, family plays the most significant role in long-term care and thus retirees will often turn to their family for care.

In Summary:

Long-term care planning is basically laying down a safety net for retirement, which is crucial in addressing rising housing and food costs. It is the responsibility of Freddie Mac employees to meet with their financial advisors to identify all the possibilities of protecting their future. This planning is not only about risk avoidance it is also about assisting in a steady and protected path to retirement.

Sources:

1. Shah, Samir. 'Genworth Releases Cost of Care Survey Results for 2023: Twenty Years of Tracking Long-Term Care Costs.' InsuranceNewsNet, InsuranceNewsNet, Mar. 12, 2024,  www.insurancenewsnet.com .
2. Stulick, Amy. 'Nursing Homes See Lowest Cost Increase Among Long-Term Care Settings in 2021.' Skilled Nursing News, Skilled Nursing News, Feb. 16, 2022,  www.skillednursingnews.com .
3. Noceti, George M. 'Checklist: Is It Time for Assisted Living?' Morgan Stanley, Horsesmouth LLC, 2018,  www.morganstanley.com/theintegragroup .
4. Reimer, Jennifer. 'Support for an Aging Parent or Relative.' Advisor.morganstanley.com, Morgan Stanley, 2018, advisor.morganstanley.com.
5. Haendiges, Brian. 'The Cost of Long-Term Health Insurance.' Genworth Financial, Genworth Financial, 2024,  www.genworth.com .