Why Every Retirement Plan Should Include Long Term Care - 6/09/08

INTRO: Medicaid will pay for nursing home costs, but you won't be able to keep much money or property.  Is there any way to cover long term care without losing your home and life savings? 

1. WHEN WE PUT TOGETHER OUR RETIREMENT PLAN, DO WE NEED TO INCLUDE LONG TERM CARE?

A. Yes.  The seniors we see have two major concerns:  They don't want to outlive their money, and they want to be able to pay their medical bills and expenses.

B. Today's long-term care costs Bespecially when adjusted for inflation B represent a serious financial risk and exposure.  The United States Department of Labor views long-term care expenses as the greatest uninsured risk Americans face today.

C. Medicare and Medicare Supplements only address short-term care geared toward recovery.

D. 37% of those needing long-term care are under age 65. The average 65-year-old non-smoker will be healthy for 16-18 years and then sick 5-7 years.

2. WON'T MEDICAID PAY FOR LONG TERM CARE?

A. Medicaid is the largest payer of long-term care expenses.  Medicaid requires that you spend down your assets and income first, before qualifying.  You can't get Medicaid if you have much money or property.

3. IS LONG TERM CARE INSURANCE A GOOD IDEA?

A. If you don't purchase long-term care insurance and instead choose to self-insure this major financial exposure, that is a terribly expensive way to pay these costs.  By comparison, any premium paid to have an insurance company reimburse long-term care expenses dramatically discounts such expenses.

B. We design each individual's long-term care insurance plan to make it as cost-effective as possible.

C. The federal government has given us incentives by the availability of tax-deductible premiums. The states are giving incentives by establishing what are called Partnership programs.

4. WHAT ARE PARTNERSHIP PROGRAMS?

A. The premise of a Partnership Program is to delay or eliminate the need for people to rely on Medicaid by giving incentives for consumers to buy long-term care insurance. 

B. The consumers are given an incentive:  by purchasing a partnership-qualified long-term care policy (or owning one that meets partnership guidelines), the consumer's assets that are protected from Medicaid spend down will equal the long-term care insurance coverage.

C. For example, let's say you are single and you go to a nursing home.  You can't get Medicaid normally until you've Aspent down@ to $1500.  But with a LTC policy qualified under the Partnership Program, if your long-term care policy provides $300,000 of benefits, this amount is protected from Medicaid spend down, and you won't have to lose that amount of your savings before you can qualify for Medicaid. That's a great relief, especially for couples who have a spouse still at home.

CLOSE: Ohio's new Partnership Program may be just the financial protection you need against nursing home costs.