Alaska's 'Golden Age' on the Horizon, but Rising Long-Term Care Costs Pose Economic Challenges
President Donald Trump's inaugural address on January 20, 2025, proclaimed, "The future is ours, and our golden age has just begun."
Central to this vision is a series of executive orders to revitalize domestic industries, focusing significantly on Alaska's abundant natural resources. These policy shifts promise economic rejuvenation for the state but also highlight existing challenges, particularly the escalating costs of long-term care for its residents.
Long-term care costs have historically posed significant financial challenges for families across the United States, and Alaska is no exception. In fact, Alaska consistently ranks among the most expensive states for long-term care services.
According to the LTC News survey of long-term care costs, the average monthly cost of in-home care in Alaska is approximately $5,753, while the base cost for assisted living expenses, before surcharges, averages $6,427 per month.
Nursing home care in Alaska is exceptionally costly, with private rooms averaging $25,236 per month statewide (not a typo) and reaching $27,239 per month in Anchorage. Yes, that is over $300,000 a year.
Alaska's vast geography and sparse population mean fewer nursing homes, leading to higher demand and limited competition, which drives up prices. Plus, labor costs impact all long-term care costs in Alaska. Healthcare workers in Alaska command higher wages due to the state's overall high cost of living and the difficulty of attracting and retaining skilled and semi-skilled professionals in remote areas.
Despite projections of economic growth heralding a "golden age" for Alaska, the financial burden of future long-term care services is expected to persist and potentially worsen for Alaskan families.
The state's aging population is anticipated to increase the demand for extended care services, thereby driving costs even higher. A report by the Alaska Department of Health forecasts that total spending on Medicaid services will nearly double, reaching approximately $6.5 billion by 2044.
Drill Baby Drill
The state's economic outlook is bright, but recent years have been more challenging because of national energy policy. Alaska's oil production has steadily declined from its peak in the late 1980s when the Trans-Alaska Pipeline System transported over two million barrels per day. Daily production has hovered around 450,000 barrels in recent years, largely due to aging oil fields and regulatory hurdles that have slowed new development.
However, with President Trump's recent executive order lifting restrictions on Arctic drilling and expediting permitting for energy projects, industry experts predict a resurgence.
The policy shift could lead to expanded drilling in the Arctic National Wildlife Refuge (ANWR) and the National Petroleum Reserve-Alaska (NPR-A), attracting major oil companies back to the region.
Increased investment in liquefied natural gas (LNG) export projects, such as the long-stalled Alaska LNG pipeline, could also gain momentum, providing new economic opportunities and strengthening the state's role in U.S. energy independence over the next decade.
Revitalizing Oil Production
On his first day back in office, President Trump signed an executive order to maximize resource development in Alaska. The order seeks to reverse previous restrictions on oil and gas exploration, particularly in the Arctic National Wildlife Refuge (ANWR), and expedite the permitting process for energy projects.
Alaska's political leaders have welcomed these initiatives. Governor Mike Dunleavy stated that these actions will enable responsible resource development, create jobs, and strengthen Alaska's economy.
In my discussions with President Trump and his incoming staff, the whole idea here is to provide opportunity, hope, and a clear runway.
Economic Implications
The anticipated increase in oil production could significantly bolster Alaska's economy. Historically, the state has relied heavily on petroleum revenues, which have funded public services and provided residents with annual dividends through the Alaska Permanent Fund. Enhanced oil activities are expected to create jobs, increase state revenues, and attract investments.
Population Growth and Income Prospects
An economic upswing could make Alaska a more attractive destination for workers seeking opportunities in the oil sector and related industries. This influx could lead to population growth, increased demand for housing, and a boost in local businesses.
Consequently, residents may experience income growth as job opportunities expand and wages potentially rise due to heightened demand for skilled labor.
The Challenge of Long-Term Care Costs
Amid these optimistic projections, the state faces a significant challenge: the soaring costs of long-term care services. Alaska has some of the highest long-term care expenses in the nation.
These escalating costs underscore the importance of proactive retirement planning for Alaskans. Without adequate preparation, individuals may find their savings rapidly depleted by long-term care expenses.
Several Long-Term Care Insurance specialists interviewed by LTC News have assisted many Alaska residents in planning for their future care needs. While many remain optimistic about the state's economic outlook, they also acknowledge the significant risk of requiring long-term care as life expectancy rises.
Given the steep cost of quality care in Alaska, they emphasize that having a comprehensive plan in place is essential.
Long-term care costs significantly affect income and assets, especially in Alaska. Quality care is expensive, and without Long-Term Care Insurance to help cover the costs, families often face physical, emotional, and financial hardship.
Top LTC Insurance specialists recommend Alaskans consider adding Long-Term Care Insurance to mitigate the future costs. LTC Insurance is custom-designed, and an affordable option can usually be found.
Premiums for LTC Insurance vary dramatically between insurance companies. The LTC News review of LTC Insurance premiums shows how premiums differ between the top insurance companies.
The LTC News Long-Term Care Insurance Education Center has comprehensive information to help you learn about your options. There are only a few specialists in long-term care planning nationwide, and even fewer are licensed in Alaska. LTC News can connect you to a pre-screened LTC Insurance specialist to provide accurate quotes from all the major companies offering long-term care solutions.
State Initiatives and Resources
The State of Alaska offers resources to assist residents in planning for long-term care, which can be found on LTC News - Alaska Long-Term Care Resources.
For those with limited financial resources, the state provides information on available long-term care plans, eligibility criteria, and enrollment procedures. Medicaid will pay for long-term care services for those who meet the eligibility requirements.
Standard health insurance policies and Medicare only pay for short-term skilled care. However, for those with savings, Long-Term Care Insurance is essential to help Alaskans access their choice of quality care, protect their income and assets, and ease the burdens otherwise placed on those they love.
Alaska's Aging Problem
Aging is becoming a significant problem in Alaska. The state has a relatively high migration rate from the lower 48, with many residents moving in and out over time. This transient nature suggests many Alaskans may have close family members living elsewhere. LTC Insurance helps loved ones, even from afar, ensure you have the quality care you need when the time arrives.
As of July 1, 2024, Alaska's population was estimated at 741,147. According to the U.S. Census Bureau, 14.4% of Alaskans are aged 65 and over. Alaskans aged 60+ (147,504) represent more than 20% of the state's total population.
According to the Alaska Commission on Aging, Alaska's 85+ population is expected to increase by 500% between 2022 and 2050 to 30,000 seniors, of which 1/3 will experience Alzheimer's and related dementia.
Balancing Economic Growth with Social Responsibilities
As Alaska stands on the cusp of a potential economic revival driven by renewed oil production, it is imperative not to ignore the consequences of aging and its impact on Alaskan families and finances.
While increased revenues can enhance public services and infrastructure, addressing the pressing issue of future long-term care costs remains crucial.
Most people obtain LTC Insurance between the ages of 47 and 67. Premiums vary dramatically between insurance companies and are custom-designed. However, because of medical underwriting, waiting for a health issue to occur is not recommended, as you may have few or no options.
Alaska has available long-term care providers, which you can find on the LTC News Caregiver Directory. However, paying for this care will be expensive unless you include a plan to address aging as part of your retirement plan.
A Reality Facing Every Alaskan
Aging is an undeniable reality in Alaska, where harsh winters and limited care options can make long-term care even more challenging. Without proper planning, the financial and caregiving burden will likely fall on your family, straining their time, emotions, and resources.
Long-term care costs continue to rise, and relying solely on savings or family may not be enough to ensure quality care and ease the stress and burden otherwise placed on those you love.
Preparing in advance with options like Long-Term Care Insurance or strategic financial planning can help protect your assets and ease the strain on your loved ones, giving you peace of mind for the future.