Posts Tagged ‘Medicaid LTC’
Affluent Boomers Consider Long-Term Care Top Risk to Well-Being in Retirement
Yet only 3 in 10 have made a plan to address this issue. Why would people worry about a problem many of them will face (70% per HHS), but take no action to mitigate it? I’ve concluded the reason is that they think the insurance to pay for LTC is too expensive.
Many insurance agents will not work with LTC strategies as it is too different from what they typically do. If they do, they may have only one of two solutions to work with. Surely you would not go to a podiatrist to have a tooth pulled. He is a doctor, but does not specialize in what ails you.
I am a specialist that for the past 22 years has worked exclusively in the field of financing LTC. It turns out that LTC insurance is the least expensive way to plan for care in later years – if you investigate it while still healthy enough to get it. To address those price fears let me offer the following:
A 65 year old, whether male of female, can have over 3/4 of a million dollars of LTC insurance overage for under $2000 a year premium. Is that expensive, or a pretty good deal? Could you invest $2000 a year and end up with 3/4 of a million dollars in the stock market? And what if you needed care just 3 years later, you would have $6000 and a bit of interest (or maybe some loss).
Now, here is the disclaimer: a 65 year old person gets $70/day LTC insurance benefit. This will, along with a Social Security check, cover most of home care or assisted living facility costs, which is 80% of the care used today. There is a 90 day deductible (elimination period), and it includes an automatic 5% compound increase in the daily benefit. If care costs less than the insurance benefit, the excess cash is given to you and is income tax free.
After paying the tax deductible premium of $1980.94 each year for 20 years, the total spent on premiums is $39,618.80. If care is needed then, the benefit paid out (with the automatic 5% compound inflation factor) will start at $195/day. It will increase each of the 10 years you can collect from this policy, giving you a total available over 10 years of receiving $852,603.
Some may counter that people don’t typically spend 10 years in a nursing home, and I agree. This will pay for in home care, adult day care, assisted living facility care or a nursing home, but will not be enough cash flow for a nursing home.
Most LTC is done in your home or in the assisted living facilities. The mentioned insurance benefit and a Social Security check will allow you to pay for in home care, or an assisted living facility (where most care is done) and hopefully keep you from ever seeing the inside of a nursing home. It will hopefully keep you from having to spend down to Medicaid impoverishment (which includes having to cash in life insurance over $1500). Your heirs will be able to inherit what you have at death. Most importantly, when you pay for the care you need, you can go anywhere you want to obtain that care. Your children will not be stuck caring for you, or deciding what to sell first when you cannot afford care.
For more information, visit www.TheLongTermCareGuy.com or call (800) 219-9203 to start investigating.
We Simply Cannot Believe We Are Getting Older – A Conversation Overheard
A few days ago, I overheard a woman who looked as if she were in her 50s talking on the subway to another woman who looked to be in her 50s.
One told the other, “My mother is coming to New York. But she’ll have a hard time getting around. She can’t climb up stairs, or walk so good.”
The other woman asked, “Why not? The first woman said, “Her leg is still infected.” “Still?” asked the second woman. “But it’s been infected for months. When will it clear up?”
The first woman tried to explain to the second woman that, sometimes, people in their 70s have health problems that stick around for months, or years, even though the patient follows doctors’ orders and takes the right medicines.
The second woman, who was starting to get on in years herself, and might be rapidly aging out of a chance to get through the long-term care insurance (LTCi) medical underwriting process, seemed to have a hard time absorbing the idea that, toward the end of life, people may not get better.
Maybe that kind of defensive optimism about health problems is one of the psychological obstacles to people buying, or even thinking about buying, LTCI.
Many people just have a hard time imagining that anyone will need care for the long-term. They assume that people will just apply a little elbow grease to getting better, and, of course, get better. But at some point, sadly, most of us stop getting better.
That is what Long-Term Care is, not necessarily getting older, but having some chronic condition that does not end our life, but makes our life so difficult we need help. At some point we will simply not be able to jump as high, walk as far, perhaps not bathe or dress ourselves as easily as we once did, and need some help.
Once this happens, it is too late to insure for the cost of such care which can be far more than many of us ever earned in a full year on our jobs. In fact, it is one of main the reasons people quickly spend through their life’s savings, and end up on a government assistance program called Medicaid.
If you are in your 40’s or 50’s, or 60’s if still healthy enough, why not investigate the insurance that pays for LTC? You probably need less of it than you imagine, because when you cannot do traveling, or playing with the toys, vehicles, etc. a surprising amount of available income can be redirected towards the expense of LTC.
Even if you wish to protect your nest egg for heirs, the income (yield) can go towards the bills as well. Insurance simply makes up the shortfall so you don’t spend down to impoverishment.
For more information, visit www.TheLongTermCareGuy.com or call 920 884-3030 to investigate with the help of an expert in this field who can give appropriate direction.
Do You Know Someone Who May Soon Need Help Managing On Their Own?
We all dread the time when we may need some assistance due to not being able to manage on our own anymore. It happens to others, but surely, not us. We are never prepared when a loved one needs help, and then we find out how expensive such care is. There seems to be no one place with all the information we need to formulate a plan.
Many family meetings occur in my office, trying to figure out how the family will care for Mom or Dad. The usual questions include: will the VA provide any assistance? Yes, perhaps, through a program called Aid and Attendance. It is a needs based program (meaning your assets must be somewhat limited) that can be available to veterans and even their spouses to help pay for care.
Medicaid is another possible assistance program. It, however, requires strict impoverishment, spending down to very low asset and income levels and is a last resort. There are things a family can do to protect some assets from this spend-down requirement, and this is often a topic of much interest.
If some funds are available from savings or home equity, there are some little known strategies to produce an income for life that requires far less of these assets than a typical life annuity. When life expectancy is less than “average” for someone’s chronological age, this can seem like a miracle. Being able to pay for the needed care and never running out of money is a very good thing indeed.
If you or someone you care about is going to need some help with day to day activities, and you have no idea where to start looking for help, call us at The Long Term Care Guy. We are Wisconsin specialists based in Green Bay, but can help with questions no matter where you are.
Give us a call at (920) 884-3030 or (800) 219-9203 or send us an email at [email protected]
Medicaid Enrollments Surge
With the Affordable Care Act now signing up health insurance customers online (in theory), statistics are emerging. For every one person getting healthcare from an insurance company, four more people are enrolling in Medicaid.
The government has only so much money to go around. With 10,000 Americans a day turning 65 and signing up for Medicare, and a majority of them unprepared to pay for their own Long Term Care, a large percentage of them will be hoping for Medicaid when they need care LTC later.
If you are healthy at 50-60 years old, it is easy to do what Congress does and kick the can down the road. The problem is that the older you are and the less healthy you are when care is needed, your options are extremely limited. Many will have to pay for care out of pocket, impoverishing themselves and their families before hoping Medicaid will be able to help with their LTC. In many places Medicaid LTC means nursing home only, with no option for care at home or in an assisted living facility.
Not only are Americans getting older, but the LTC insurance companies are getting more wary of us. Qualifying for coverage is getting more difficult, benefit periods offered are getting shorter, women pay 50% more than men with many insurers, etc. With interest rates so low, and LTC insurance benefits contractually set to increase at 5% compound every year we have the coverage (to keep up with rising LTC costs) several insurers have left the market.
If you have assets you would like to leave for family, or income you would like to leave for a spouse, and you do not have millions you can afford to spend for something that you could insure against, it would be prudent to investigate LTC insurance while it may still be available to you. The good news is that you do not need as much of it as you might think. Once you realize that a portion of the cost of LTC can come from available income, then only the remainder may need to come from insurance.
Lifetime benefits are no longer available. Policies that are paid up in just 10 years, or at age 65 (like I own) are a thing of the past. Life insurance policies that will pay part of the death payment in advance for LTC are available but generally do not contain the 5% compound inflation clause that traditional LTC insurance offers.
My benefit with 5% compound inflation means that what I will receive from my policy will be twice today’s benefit in 15 years, and four times today’s benefit in 30 years. If you are 55 years old today, a nursing home that costs $8500 a month now will be $34,000 a month at age 85. Even this does not take into account what happens in every industry when it is difficult to get enough workers to apply for the open positions – wages rise.
If you want to stop kicking the can down the road and investigate a solution that works, visit www.TheLongTermCareGuy.com and learn what can be done. To calculate future costs visit http://www.RetirementChoices.net/rraabeLTC1.html You can move all the numbers around to see how much you would need to set aside today, to pay for future LTC costs out of pocket without insurance. The cost of self-insuring is huge!