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!