LONG TERM CARE INSURANCE -- WOULD YOU BUY IT IF IT WERE FREE?
Too many of us don't give much thought to the aging process until we are
suddenly faced with its nasty effects on a relative or friend. In my case,
it took the misfortune of my uncle to bring home the realization -- GETTING OLD
CAN BE SCARY.
He was not eating properly. Since he lived alone, it was too late by
the time my cousin checked on him. He was unconscious. There was
hardly any food in his kitchen. Apparently, he had not been eating
properly for a while. The damage was permanent: it was obvious he could no
longer care for himself. And so the hunt was on for a good nursing home
facility.
Like my uncle, at some point you may need help with everyday actions you now
take for granted. Simple functions such as preparing meals and taking the proper
medication can become a problem. The number of people requiring such help is
surprising.
BY THIS YEAR, NINE MILLION SENIORS WILL REQUIRE HOME HEALTH CARE. THIS IS A
CONCLUSION OF EXPERT GOVERNMENT STUDIES.
The cost of such care can be staggering:
The National Average can be OVER $40,000 PER YEAR
New York's Nursing Home Rates
This is the cost for daily care provided by one Home Health Aide, based on
actual charge of $111.20 per eight hour day.
WILL YOU BE ABLE TO FINANCE THE HUGE COST OF HOME HEALTH CARE?
NO PROBLEM - MEDICARE WILL TAKE CARE OF IT.
Will it? Actually, contrary to common belief, 89% of home health care costs
and nursing home costs are left uncovered by MEDICARE. The qualifications to
receive MEDICARE IN A NURSING HOME ARE:
* "skilled" care only and one must be showing progress.
* In a certified skilled nursing facility, and
* Prior hospital stay.
Most of the care in a nursing home is not skilled, but rather "custodial".
Then the time in the facility which is covered by MEDICARE is limited to 100
days maximum. Considering an average nursing home stay for a year costs about
$30,000, in a short amount of time all your assets are gone.
In fact, after six months in a nursing home, most people will be impoverished
and forced to depend on MEDICAID (state system for those with little money or
assets).
GIVE IT ALL AWAY, CLAIM POVERTY AND HAVE THE STATE PAY?
For those with ample assets who plan to transfer these assets before going
into a long term care facility and have state to pick up the costs - think
again! Since the enactment of Omnibus Reconciliation Act (OBRA) - 1993, there is
a 36 month "look back" period of time to see when your assets were transferred
to someone else. If you used a trust to transfer your assets, then the look back
is 60 months!
As the Federal government cuts back on funds to each state, states are making
it more difficult for you to use MEDICAID for nursing homes. For example, if you
have $200,000 in liquid assets the following formula might be used:
$200,000 in liquid assets
$25,000 per year cost of nursing home
$200,000 divided by $25,000 = 8.
Therefore, one must wait eight years
before being eligible for MEDICAID.
For instance, in the state of Virginia Medicaid,
a patient's gross monthly income must be less than the monthly private rate for
care in a nursing home.
The patient's resources (cash, money in checking
and saving accounts, certificates of deposit, stocks, bonds, the value of real
estate other than the home, or personal property) cannot exceed $2,000.
A patient may be ineligible for Medicaid if he
or she (spouse included) has transferred property for less than fair market
value within 30 months before applying for Medicaid.
And then there's this question -
DO MEDICAID Patients GET THE SAME TREATMENT AS
THE PRIVATE INSURANCE PATIENT?
A visit to a private nursing home and one which
is predominantly MEDICARE would be very instructive. My experience is there is a
noticeable and significant difference in the quality of facility and care.
ARE YOU WAITING FOR THE CONGRESS HEALTH REFORM?
You are wasting your time! Of more than 1,400
pages of the "Health Security Act" only a small portion is dedicated to long
term care. The three key provisions addressed are:
* Expansion of home care services.
* Improvement of conditions for individuals to qualify for MEDICARE, and
* Incentives for people to use insurance companies for long term care by
providing tax deductions for long term care premiums.
The government may be providing incentives for the
insurance companies to pick up the cost of long term care, but who wants to pay
the premiums? Suppose it did not affect your cash flow, but was just a matter of
re-allocating your present assets?
Or put it another way -
WOULD YOU BUY LONG TERM CARE COVERAGE IF IT WERE
FREE?
We at AAP suggest you review your money
situation. A simple change such as moving your money from CDs or the savings
account, to a higher yielding income fund which invests
in such government securities, could produce enough of an increase in your return
to pay for the premiums for a long term care plan, without taking more money out
of your cash flow..
It is not unusual for income funds to
return 7% compared to 3% from your bank account or CDs. Take the 4% gain from
the money move and pay for the long term care premium.
WHY A LONG TERM CARE POLICY?
Assure yourself comprehensive benefits
which allow you the flexibility to use the type of care which is right for you.
Would you prefer to enter a nursing home or stay
at home? So why not $150.00 a day, $54,000 a year for services in the comfort of
your own home? This coverage will even help you stay at home by providing cash
for needed modifications to your home to aid mobility such as entrance ramps.
Or if you require a nursing home there is
$150.00 per day ($54,000) available as a lifetime benefit. You can relax and
never worry again about MEDICARE rules such as prior hospitalization. With your
own long term care policy, it is not required. And all benefits will begin with
your first day of care or service.
If long term care is a concern of yours, you
probably have questions. Maybe even lots of them...That is good! If I have
stimulated you to think about this, then I have done my job!
Now it's time to do yours!
Please give me a call for an appointment while
this is fresh on your mind. Even if you are skeptical, which is only natural, a
phone call can't hurt. The worst you will do is spend a few minutes learning and
you can ease your mind.
Just call the number listed below and if myself
or Susan is not there to talk to you personally, leave your name and phone
number with our friendly receptionists and we will return your call promptly.
Over the years, we are proud to say, AAP
have made a real difference in people's lives. Why not spend a little time to
find out for yourself how we might make a difference in your life or your loved
one's life?
