Long Term Care Costs
Alzheimer’s May Strike Women and Men in Different Ways
At the end of February, the website HealthDay published an article entitled “Alzheimer’s May Strike Women and Men in Different Ways”. (https://consumer.healthday.com/2-25-alzheimers-may-strike-women-men-in-different-ways-2650728831.html )
Here is a quote from that article: “The ravages of Alzheimer’s may strike later in women than men, but once it takes hold women tend to deteriorate far faster than men, according to a new study. Something known as cognitive reserve helps the aging brain function better for longer, and researchers report that women appear to have more of it than men. But once the reserve runs out, mental decline in women speeds up.”
As you read this, it would be good to ask yourself if you have your Long-Term Care (LTC) insurance yet. Once health problems are on your medical record, it may no longer be available to you.
LTC insurance is a little like car insurance – you have to have the insurance BEFORE the accident.
Is your plan to move in with your children when you need care? Have you discussed this with them? Can they care for you full time and still work to earn a living, and to raise your grandchildren?
Look at some ideas, www.TheLongTermCareGuy.com has a number of short videos. Watch them, then start planning for your care. I’m here to help.
It’s the Holidays, Let’s Talk
How long has it been since you have seen all of the family? How are they doing? Perhaps not as well as last year? Perhaps it’s time to talk.
It’s the holidays, this is the time of year when many families realize a family member is not doing as well as s(he) has in the past, and may need some help. Perhaps s(he) just need help with lawn care or snow removal. It might be the house is not as neat as it always was, or perhaps bills and paperwork are being neglected. Maybe it’s time to talk.
It’s the Holidays, many families realize a family member may need some help
This is not something we look forward to, and it seems the job more often than not falls to the women in the family. Women seem to be overwhelmingly tasked with caregiving. Employers know that the holidays are when female employees often request leave to deal with family issues, making caregiving a workplace issue as well. Wages are sacrificed and productivity falls; seasonal demands may exacerbate the problem. An article in the AARP publication estimated that in 2009, there were 66 million unpaid caregivers in the US, and the number is growing. Unpaid caregivers average 20 hours of caregiving a week.
This caregiving is not without cost. Caregiving takes a toll on the health of caregivers which lingers long after the death of the family member cared for. It also costs real money. In addition to the career and income sacrifices, many caregivers contribute significant dollars while assisting loved ones.
By having a Long-Term Care (LTC) discussion, plans can be made to share the responsibilities. Other family members may discover they can contribute time and resources to help. Perhaps professional caregiving either at home or in a facility is required and planning – even at the last minute – can provide solutions, rather than simply spending available money and hoping to qualify for government assistance. Once financing strategies are discovered, more planning options may become available.
It is the Holidays, family time, perhaps it’s time to talk
The holidays can be an appropriate time to discuss these issues because the family member’s needs might be more apparent. Any time of year can be a good time to consider how the care you may someday need will impact your family as well. Are you prepared to handle your long-term care needs? If you might pay for care, where will the money come from? What will be left for family after your care needs are over? Perhaps you might investigate LTC insurance while you are still healthy so that funding is not an issue when you need care. LTC insurance pays for care in your home, day care facilities, assisted living facilities commonly called CBRF’s or RCAC’s, and traditional nursing homes. Pennies on the dollar now can save hundreds of thousands of dollars later.
Have you ever wondered….
Do you have questions about the cost of long term care?
Do you have questions about the cost of long term care?
Are your clients confused about the many options, how to choose coverage, or if it’s necessary for them?
I’m Romeo Raabe LUTCF, LTCP and I’m known as The Long Term Care Guy–in fact, my website is www.TheLongTermCareGuy.com and I work exclusively on Long Term Care (LTC) issues. Some examples include how to get the most from LTC insurance, how to start a claim, what to do if care is needed and there is no insurance—and much more!
I also offer insurance for LTC and have options most financial professionals are not even aware of. For example, this week I put coverage in place for a couple ages 87 and 84 for less than $90/month a piece.
Even if someone is in care – even if already on Medicaid – I may still be able to help. If you or your clients have questions, feel free to call me at (920) 884-3030. I am here to help anyone dealing with or concerned about LTC.
Contact ROMEO RAABE about the cost of long term care!
PS: There can be huge differences in LTC insurance policies—I can help you understand the differences, and probably even set you up with other strategies most other advisors don’t know about!
CORONAVIRUS AND LONG TERM CARE
COVID-19’s added costs likely will lead to increases in insurance premiums and long-term care costs!
More than 18 million people have been infected by coronavirus worldwide, about a quarter of them in the United States. It is likely to be years before the costs for those who have recovered can be fully calculated, according to Reuters interviews with approximately a dozen physicians and health economists.
These experts point to the potential for billions of dollars in long-term healthcare expenses, as studies of patients with COVID-19 continue to uncover new complications associated with the disease. They say the costs stem from COVID-19’s toll on multiple organs, including heart, lung and kidney damage that likely will require costly care, such as regular scans and ultrasounds, as well as neurologic deficits that are not yet fully understood.
The added costs likely will lead to increases in insurance premiums and long-term care costs. Bruce Lee of the City University of New York Public School of Health estimated that if 20% of the U.S. population contracts the virus, the one-year post-hospitalization costs would be at least $50 billion. This is before factoring in longer-term care for lingering health problems. Without a vaccine, if 80% of the population became infected, that cost would jump to $204 billion.
“On a global level, nobody knows how many will still need checks and treatment in three months, six months, a year,” Marco Rizzi, M.D., a physician in Bergamo, Italy told Reuters. Rizzi has seen nearly 600 people with COVID-19 for follow-up. He is co-chairing a World Health Organization panel recommending long-term follow-up for patients. Even those with mild COVID-19 “may have consequences in the future,” he added.
LTC Comment: Covid-19 hit LTC when it was already down. The perfect storm of an oncoming economic catastrophe and growing long-term health care costs may finish the welfare-financed system. Will private financing markets, including home equity conversion and private LTC insurance, fill the breach?
How will you or your clients pay for their LTC costs?
Assets have lost value, LTC costs are up and likely to go higher. LTC insurance with an automatic 5% compound inflation factor WILL keep up with increasing costs and allow those insured to get the care they need where they want it, instead of relying on a Medicaid nursing home.
Families Forced to Find New Long Term Care Facility After Policy Changes
Families Forced to Find New Long Term Care Facility After Policy Changes
Families forced to find new long term care facility after policy changes
Is it possible to lose money on every customer and make it up in volume? Of course not! Aren’t you glad you have this covered?
You will know people who need care and did not plan. I can still help some of them at least protect their burial money–Medicaid requires that beneficiaries cash in life insurance before they receive benefits, so life insurance benefits won’t be available to pay for final expenses. Contact me for more information!
Romeo Raabe, The Long Term Care Guy
www.TheLongTermCareGuy.com
(920) 884-3030
Don’t get caught in this long term care trap! Many people are.
Often agents sell policies for a cheaper price because they didn’t include the all-important automatic inflation on benefits. Don’t get caught in this long term care trap!
I am being approached by many people who purchased long-term care (LTC) insurance many years ago. They bought the LTC insurance from their life insurance agent, their financial planner, or their home insurance agent – not a specialist in LTC. These agents knew life or home owners insurance, but often just “dabbled” in long term care sales. Maybe they had just one company’s product to sell. Often, they sold the policies for a cheaper price because they didn’t include the all- important automatic inflation on benefits.
Long term care costs have been increasing more quickly than inflation, doubling almost every 15 years.
For example, a nursing home that charged $4500 a month 18 years ago, now charges over $10,000 a month. Costs may increase even more quickly in the future because labor costs are likely to increase. Since we have nearly full employment, employers may need to offer higher wages to attract the needed workers. We also hear talk about increasing the minimum wage to as much as $15 per hour, so costs could increase even faster.
If you have an older LTC insurance policy that doesn’t include inflation coverage, there still may be something that you can do. If you are considering investigating LTC insurance – do so with an expert. You need an expert who knows the costs, understands inflation and knows what the options are for people with these kinds of policies, so that the expert can help you determine how much of the bills you can pay yourself. That way, you don’t buy too much insurance.
I am an expert in long term care financing. I have been doing nothing but LTC planning and financing for over 25 years. I am happy to review your policy. I can help you if there are problems with your policy. I can help protect some of the money if LTC is needed and you have not prepared in advance. Many of my clients have been referred to me by their financial planner or their attorney. Learn more about me at www.thelongtermcareguy.com.
If you want to investigate how to deal with LTC, call (920) 884-3030. Let’s plan a time to investigate together.
Why Can’t I Spend my Money on Fun?
Often, retired people are afraid to spend money on fun or travel because they fear the catastrophic costs!
A recent Wall Street Journal cartoon featured a gentleman visiting his financial planner. In the cartoon, he asks the planner, “Why can’t I spend some of my money on fun now?”
Often, retired people are afraid to spend money on fun or travel because they fear the catastrophic costs they would face if one of them needs long term care (LTC). This can be a real concern, because the U.S. Department of Health and Human Services says that 70% of people who reach age 65 will need some long-term care. The great majority of us cannot afford it for long if we’re paying out of pocket.
Many people assume the insurance for LTC is prohibitively expensive. This is because they never investigated what the costs actually would be for them. I can tell you with near certainty that you need less of it than you imagine. When you finally need care, your lifestyle will change considerably. If you cannot drive there will be fewer vehicles, boats, toys, and less travel, golf, dining out, and so on. The money spent on fun (which you SHOULD do while healthy) can be redirected towards the costs of LTC.
Most people have some savings. Without touching the principle, you can spend the interest or yield it generates. Add this to the savings from your lifestyle changes, and you may find you can cover a significant portion of the costs of LTC yourself. You will only need to cover the shortfall from some other sources, like insurance, so you do not spend down all your savings and end up on Medicaid.
People investigate LTC insurance for two reasons.
- First, they do not want to go broke.
- Second, many long-term care service providers will not accept Medicaid. Nursing homes generally have to because of federal laws–but a nursing home is usually the last place you want to be. If you have the ability to pay from your cash flow and insurance, it will let you choose where and how you will be cared for. The providers will welcome you with open arms!
If you have not investigated LTC insurance, now is the time, while you are still healthy enough to get it.
It is a logical discussion and it is not appropriate for everyone. But please investigate with someone knowledgeable in planning for LTC. At The Long Term Care Guy, we have been doing only LTC planning for over 25 years. Since nearly all of our business comes to us by referral, we may even may be working with your financial planner or attorney!
Call TheLongTermCareGuy.com at (920) 884-3030 or email us for a time to investigate your situation.
Why Medicaid Long Term Care is a Bad Choice
Most assisted living facilities don’t accept Medicaid, so often Medicaid recipients needing LTC are left with only one choice—a nursing home.
Many people don’t realize that, in addition to traditional health care, Medicaid actually pays for most long-term care (LTC) in the United States. In fact, less than 40% of Medicaid dollars are used to pay for traditional health care. The small portion of Medicaid recipients (just over 20%) whose long-term care services are paid for by Medicaid use over 60% of the Medicaid budget dollars.
Most assisted living facilities don’t accept Medicaid, so often Medicaid recipients needing LTC are left with only one choice—a nursing home. This is because the federal government requires nursing homes to accept Medicaid payments if they want to accept Medicare for the rehab care they provide–and this rehab care is a major source of revenue for many nursing homes.
Wouldn’t you rather receive care, when needed, at home or in an assisted living facility rather than the nursing home? Most people would, but if you cannot afford this care – your only option might be the nursing home.
Many people mistakenly assume LTC insurance is too expensive. It can be, if it’s not chosen appropriately. Do you have a deductible on your car insurance or does it cover every last penny? Mine has a deductible, so that I pay the first part and insurance pays the expensive part.
LTC is similar. Your lifestyle will change when care is needed. You will spend less money on vehicles if you cannot drive, and spend less on golf, travel, toys, and so on. The money freed up by not spending it on these things needs to be taken into account in order to see how much care you can pay for. Then you only need enough insurance to cover the shortfall. If you have a nest egg, and do not want to use it all up, you can always take the interest it generates to help lower the insurance need even more—and never touching the principal.
Think you cannot get LTC insurance because of health? I have solutions for nearly every situation – even some for people already in care.
So, you can ignore this and hope you will not be among the 70% of us who will need care – or you can investigate options to see if this concern can be handled affordably. Your choice!
www.TheLongTermCareGuy.com Romeo Raabe is here to help, even with just advice.
What Can I Do About Long Term Care?
Long term care is very expensive. Few people are prepared for the cost when they determine they need care.
Long term care is very expensive. Few people are prepared for the cost when they determine they need care. Fortunately, there are ways to deal with the bills even if you do not have much money.
Medicaid requires beneficiaries to spend all savings and other assets down to impoverishment before they will pay for care. This includes a requirement that any life insurance with a value over $1,500 be cashed in—some people have life insurance so that there is money to pay for their funeral. If someone needs Medicaid to pay for their care, this insurance will need to be cashed in, leaving no money for final expenses as planned. Medicaid does, however, let you set aside up to $15,000 to pay for final funeral expenses if this is done in an irrevocable burial trust. I set these up for people at no cost.
Medicaid also allows you to set these irrevocable trusts up for the final funeral expenses for each of your children and their spouses in addition to the one set up for you. This allows you to leave funds to family instead of spending it all on the costs of long-term care.
Few people know of these Medicaid rules and then leave nothing but the funeral bill for their children.
You have some savings in the bank, earning very little interest. The irrevocable trusts also earn interest, cost nothing to open, and protect money from the Medicaid “spend down”. No need to spend money to open these, other than the amount you want to place in the trust.
At TheLongTermCareGuy.com, we help people deal with the costs of long-term care. We also offer alternatives to help those planning ahead to pay for long term so they don’t have to spend their assets down to impoverishment. There is no charge to meet and explore options. Call us at (920) 884-3030 to schedule a free consultation.
How to Use Untaxed Dollars to Cover Long Term Care
LTCi premiums are fully deductible on your Wisconsin income taxes, regardless of whether you itemize taxes!
You may have heard that Long Term Care insurance (LTCi) premiums can be tax deductible. But (and there is always a but), there are restrictions.
LTCi premiums are fully deductible on your Wisconsin income taxes, regardless of whether you itemize taxes, how much or how little your taxes are, or whether you have enough other medical deductions.
Federal income tax rules are a bit more complicated. First, you must itemize your income taxes. Second, there is an age-based cap on the amount of premium dollars that can be used toward the deduction. Third, that amount, along with any other medical deductions you have, must exceed 7.5% of your adjusted gross income before you can start deducting it. This takes all the fun out of it for many people.
But now there is another way to use untaxed dollars to pay for LTCi. Even though Congress authorized this three years ago, most annuity companies have not yet changed their accounting to allow this.
Let’s say that you put some money into a deferred annuity some years back. Let’s say you deposited $50,000 and over the years it has grown to $100,000. Any money you withdraw from this annuity will be considered to be interest, and thus entirely taxable.
Instead, you can initiate a direct transfer from this annuity to pay the premium on your LTCi. The IRS will consider the amount withdrawn to be proportional between principal and deferred interest. In the example above, the existing annuity is 50% principal and 50% untaxed interest, so that half of the premium would be paid with dollars that are not taxable.
Right now, this strategy works when the annuity and the LTCi are with the same company. However, the company I use most for LTCi (because it offers the best benefits for the price) has a fixed interest annuity paying 3%– a decent fixed interest rate today. If your LTCi policy is with this company, you would be able to make a direct transfer from whatever annuity you may currently own into this one, and then have your LTCi premium paid automatically with a combination of principal and untaxed interest.
All this can happen automatically. You would receive a letter each year stating your premium has been paid; meanwhile, you smile at the use of untaxed dollars to accomplish this. If you deposit enough into the annuity to generate interest equal to or greater than the LTCi premium, you will always retain the amount of the initial deposit in the annuity.
When your health changes and care is needed, how easy will it be to suddenly turn on an additional cash flow of $50,000 to over $100,000 a year? If the idea of using untaxed dollars earned in interest, to pay a bill and give you freedom to choose who will care for you and how is important to you, call www.TheLongTermCareGuy.com at (920) 884-3030 to investigate.