Congratulations baby boomers, up to three million of the 76 million of you will celebrate your 100th birthday! Today's centenarians have become the poster children for what scientists call the "longevity revolution," which has added more than 30 years to life expectancy over the past 100 years. How well you live during those extra years will depend on how well you’ve planned for the ordinary cost of living longer and the extraordinary cost if you need long term care.
We all know the value of buying life insurance – it’s there for a rainy day or to protect the people we love from the financial impact of a premature death. Yet, how well have you protected those same people in the event that you don’t die? How well have you protected your retirement income and the emotional and logistical burden of caring for you in the event that you are no longer able to care for yourself due to physical limitations or some form of dementia.
Americans are in denial about the oncoming crises in the costs of care. A recent poll indicated that 59 percent of baby boomers are concerned about the growing cost of care, yet 72 percent have made no plans. Maybe because we believe that Medicare will pay for our care. Think again. Maybe we think that Medical will pay for our care? It will, if you’ve become financially impoverished and want to stay at a Medical-funded nursing home. If you want to maintain your choices and stay out of a nursing home, your only options are to spend your own assets or buy long term care insurance.
Results of the Genworth Financial’s "2007 Cost of Care Survey" the average national cost of care in nursing homes, assisted living facilities and home-based care increased 15 percent since 2004. According to the survey, the average daily rate of private nursing home care is $204. The cost of assisted living can be close to the same price if you need care and even a home health care provider averages $19 an hour. As the costs grow an average of five percent a year, will you be able to shoulder these expenses on your own?
Although the majority of people who require long-term care are over the age of 65, a substantial 40 percent are between ages 18-64, so don't think you’re “too young,” to be in care. When considering the purchase of long term care insurance understand that you will need to meet medical qualifications and even a bad diagnoses can make the coverage unavailable. Although, once you’ve been approved for a policy, it is “guaranteed renewable,” and no changes in your health can impact your coverage. Waiting too long may mean loosing your “insurability” due to pre-existing health conditions. Because the premiums are based on your current age, waiting may also mean paying much higher premiums. Other factors in determining premiums are health, martial status and the amount of coverage you purchase.
The product is not suitable for everyone. If you have to make substantial changes in your lifestyle to pay your premiums, it isn’t for you. Like any insurance product, it is for those who have something to protect and something to loose. The product is suitable for anyone who wants to avoid an unintended invasion of their portfolio and for those who want to maintain their independence, their choices and help their kids fulfill their promise that they’ll never put you in a nursing home.
This isn’t a do-it-yourself product. Meet with an agent who specializes in long term care insurance so that they can pick the most appropriate plan at an affordable premium.
Sunday, April 26, 2009
Friday, April 17, 2009
Can't Medical pay for my long term care?
Those of us who sell long term care insurance and understand the astronomical cost of having a long term care need now and in the future, have a hard time understanding why everyone with a checking account isn't lining up at our doors to get themselves a policy before they lose their health.
I attended a talk today presented by Steve Moses from the Center for Long Term Care Reform in Washington who addressed this issue. If people believe that the government will pay for their care, they will deny the risk, avoid the premiums and when they get sick, depend on getting free care at a nursing facility. (Although that's the last place everyone says they want to be.)
Although we are told that you need to "spend down" all of your assets paying for your own care before Medical will fund it, Moses pointed out that that is not necessarily true. It is true that you must "spend down" to $2,000 in the bank before being eligible for Medical, but you don't have to spend it on your care. You just can't give it away to anyone else. If you want Medical to start funding your nursing home, you can spend it on a great vacation, a new car or refurnishing your home -- thereby artificially impoverishing yourself. Moses believes this is a disincentive for people taking personal responsibility for funding their care.
Given the financial crises that states are in, the plan to depend on Medical to pay for your care is not going to be a viable one in the relatively near future. The government is already millions of dollars behind in current Medical obligations. Moses said that 25 percent of state budgets are eaten up by Medical and 33 - 50 percent of those funds go to pay for long term care. Finding the money to pay for Medical obligations now and into the future is a "fiscal black hole," said Moses. The only way that Medical will survive is to close all the loop holes and make it a true welfare program designed to help those who are truly financially destitute.
Another fact to consider is that Medical currently pays nursing homes only 70 percent of the cost of providing adequate care. So, if becoming financially destitute and receiving your care in a Medical-(under) funded facility is your plan, go for it. But if you'd like to receive your care in the setting of your choice with the best care available, you might want to start saving lots of money, setting up some good investments, or getting insurance.
I attended a talk today presented by Steve Moses from the Center for Long Term Care Reform in Washington who addressed this issue. If people believe that the government will pay for their care, they will deny the risk, avoid the premiums and when they get sick, depend on getting free care at a nursing facility. (Although that's the last place everyone says they want to be.)
Although we are told that you need to "spend down" all of your assets paying for your own care before Medical will fund it, Moses pointed out that that is not necessarily true. It is true that you must "spend down" to $2,000 in the bank before being eligible for Medical, but you don't have to spend it on your care. You just can't give it away to anyone else. If you want Medical to start funding your nursing home, you can spend it on a great vacation, a new car or refurnishing your home -- thereby artificially impoverishing yourself. Moses believes this is a disincentive for people taking personal responsibility for funding their care.
Given the financial crises that states are in, the plan to depend on Medical to pay for your care is not going to be a viable one in the relatively near future. The government is already millions of dollars behind in current Medical obligations. Moses said that 25 percent of state budgets are eaten up by Medical and 33 - 50 percent of those funds go to pay for long term care. Finding the money to pay for Medical obligations now and into the future is a "fiscal black hole," said Moses. The only way that Medical will survive is to close all the loop holes and make it a true welfare program designed to help those who are truly financially destitute.
Another fact to consider is that Medical currently pays nursing homes only 70 percent of the cost of providing adequate care. So, if becoming financially destitute and receiving your care in a Medical-(under) funded facility is your plan, go for it. But if you'd like to receive your care in the setting of your choice with the best care available, you might want to start saving lots of money, setting up some good investments, or getting insurance.
Wednesday, April 1, 2009
Respite Care Act Offers Relief for Family Caregivers
Governments realize that unpaid caregivers help a senior or disabled person to stay in their homes and out of Medicaid - funded nursing homes, saving taxpayers millions of dollars a year. They also recognize that family or friends providing that care need a break, or “respite,” in order to maintain their own health and deal with the stress that comes with being a care giver.
Therefore, before adjourning in December, Congress unanimously approved the Lifespan Respite Care Act, authorizing nearly $300 million in grants over five years to finance the temporary help families need to relieve those unpaid caregivers.
The Act authorizes competitive grants to states through Aging and Disability Resource Centers, which must work in collaboration with state respite coalitions or state respite organizations to make quality respite available and accessible to family caregivers, regardless of age or disability. The Act requires grantees to identify, coordinate and build on federal, state and local respite resources and would help support, expand and streamline planned and emergency respite, and provider recruitment and training.
Respite care may take place at home or out of the home and allows caregivers some time off, while providing quality care and social interaction for loved ones. Respite care also helps keep families together, helps prevent abuse and neglect, and forestalls premature, costly institutionalization and possible impoverishment.
The bill's unanimous passage demonstrates the importance lawmakers place on health-care issues. Bush's support was another effort by the administration to persuade families to use home care and reduce high Medicaid expenditures on nursing homes.
Therefore, before adjourning in December, Congress unanimously approved the Lifespan Respite Care Act, authorizing nearly $300 million in grants over five years to finance the temporary help families need to relieve those unpaid caregivers.
The Act authorizes competitive grants to states through Aging and Disability Resource Centers, which must work in collaboration with state respite coalitions or state respite organizations to make quality respite available and accessible to family caregivers, regardless of age or disability. The Act requires grantees to identify, coordinate and build on federal, state and local respite resources and would help support, expand and streamline planned and emergency respite, and provider recruitment and training.
Respite care may take place at home or out of the home and allows caregivers some time off, while providing quality care and social interaction for loved ones. Respite care also helps keep families together, helps prevent abuse and neglect, and forestalls premature, costly institutionalization and possible impoverishment.
The bill's unanimous passage demonstrates the importance lawmakers place on health-care issues. Bush's support was another effort by the administration to persuade families to use home care and reduce high Medicaid expenditures on nursing homes.
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