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Long-Term Care Insurance: 3 Common Misconceptions

by My Senior Health Plan
written by My Senior Health Plan

Like any insurance plan, long-term care insurance provides financial relief when you need it most.

However, long-term care insurance is expensive. Given the expense, people put off buying a long-term care (LTC) policy or even making a plan for their future care needs.

But if they do need it (and the odds are higher as people age), and care facility costs and home-care provider fees start to build up, the premium can provide financial support and peace of mind.

Here are three common misconceptions why people think they don’t need an LTC plan and why rethinking that approach is important:

  1. “I’m healthy. I don’t need long-term care insurance.”

At age 66, Bill is in great shape. His vitals are good, and his weight is in a healthy range. He runs an annual half-marathon and lifts weights at the gym.

Additionally, neither his parents or grandparents required nursing care at home or in a facility. They all lived into their 80s and 90s, happy and healthy. With his stellar family history, Bill feels confident he won’t need long-term care. He plans to enjoy life!

While Bill is healthy and takes care of himself, it doesn’t make him exempt from needing care as he gets older. A fall or unexpected health problem could require paying for long-term care.

That might include hiring a home health aide to help with personal needs (e.g., bathing and dressing). At an approximate rate of $20 per hour, the costs add up over the weeks, months and years.

Like many, Bill is taking the I won’t need it approach. However, at the very least, he needs a plan. That includes talking to loved ones about long-term care:

Who will provide the care (his spouse, adult children, a home health aide)?

How will the costs be covered, including family members who may have to work less to help him?

  1. “I’m financially savvy and have a large retirement nest egg.”

Jackie and her husband have a substantial retirement portfolio. Having had a career in finance, she understands the cost benefits of LTC insurance. However, she’s reluctant to buy an LTC policy, as it will put a dent in their disposable retirement income.

Additionally, with the escalating cost of medical care, she’s not confident that the LTC policy will cover their care costs in 20-25 years. Going without LTC is a risk she’s willing to take.

One misconception about LTC insurance is that people will only need it in their later years. They tend to think of it as end-of-life care. However, LTC is the care you could need tomorrow while in your first years of retirement.

For example, if Jackie’s husband should need long-term care due to an accident or an unfortunate diagnosis, even with substantial retirement savings, her financial independence could be jeopardized.

She may want to weigh up the cost of care—that could run into high six figures and beyond—versus paying anywhere from $90 to $200 per spouse, per month.

  1. “I won’t qualify because I have existing conditions.”

Cody’s mom Jean has a chronic—but stable—health condition. Cody figures that the existing illness will disqualify her from long-term care insurance.

Unlike some insurance policies, LTC policies do cover people with chronic health problems. That may include diabetes, heart disease, and clinical depression. In fact, the underwriters’ lists of approved chronic conditions are substantial!

As long as the qualifying illness is stable, the insurance underwriters should approve the application.

In Cody’s mom’s situation, rather than dismiss LTC insurance due to her existing condition, Cody can work with an insurance specialist to explore their options. The specialist will walk him through carriers’ underwriting differences to find the plan that best fits his mom’s health and financial needs.

Who will benefit most from an LTC policy?

Should you need long-term care, a policy will provide financial support, allowing you to access the help you need. Also, it will relieve family members (spouse, children, grandchildren) of the economic and personal burden associated with your long-term care needs.

Ultimately, even some coverage is better than none. Also, buying long-term care insurance is as much for you as for your loved ones.

Now is an excellent time to start a conversation about your long-term care needs.

Aaron is MySeniorHealthPlan.com’s retirement specialist. He can help you explore your options and find a policy that fits your financial needs.

Call Aaron today: 1-877-255-6273

 

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Alzheimers Reality: Financial and Family Dynamics
Conditions & Treatments

Alzheimers Reality: Financial and Family Dynamics

by Jeff Dailey
written by Jeff Dailey

The Reality of Alzheimer’s in America

Financial Struggles and New Family Dynamics

September is World Alzheimer’s Month, an international campaign to raise awareness and challenge stigma. Alzheimer’s disease has become so prevalent in the country, and the cases of Americans living dealing with the disease will only grow rapidly in the next years. By tomorrow or next week, it could hit any of our loved ones or ourselves, and we need to prepare for what it brings now.

The Individual with Alzheimer’s

According to the Alzheimer’s Association, more than five million Americans are living with the disease. The numbers are quite high, and chances are you know of at least one person dealing with it at the moment. Alzheimers Reality: Financial and Family Dynamics
The organization further illustrates the severity of the situation by sharing that a person in the United States develops the disease every 66 seconds, and that one in three seniors dies with Alzheimer’s disease or some other form of dementia. It is even ranked as the sixth leading cause of death in the United States. Reality of Alzheimers: Financial and Family Dynamics
In addition to this, Alzheimer’s is an expensive disease to have in America. The costs of care could significantly dwindle down a person’s assets. On average, the price tags on care include $6,844 per month for a semi-private room in a nursing home and $7,698 per month for a private room. A person would have to shell out $3,628 per month for basic services in an assisted living facility, $3,861 a month for a home health aide, and $1,473 a month for adult day services.

Family Dynamics after the Diagnosis

However, the diagnosis does not solely affect the individual. Alzheimer’s changes the dynamics in every family, and it takes a massive toll on family members and loved ones. Parents now find themselves leaning on their children for support and assistance; spouses become dependent on their partners for so much more than they ever expected, and children revert to their now aging parents for care. Often, family members are in the situation where they need to sacrifice aspects of their lives to provide the care that their loved ones require. Some leave their chosen careers, put starting a family on hold, and give up social activities to assume the role of primary caregivers to their loved ones. Alzheimers Reality: Financial and Family Dynamics
Family caregivers give up so much more than their time to meet the demands of caregiving. In 2015, more than 15 million caregivers attributed 18.1 billion hours of unpaid care. On average, family caregivers are put behind $5,000 a year for caring for a loved one with Alzheimer’s. While the amount might not seem like much for some families, it could mean going hungry for many struggling to keep up with the costs. Alzheimers Reality: Financial and Family Dynamics
For many individuals, the cost of caring for a person with Alzheimer’s could translate to inevitable bankruptcy. A recent article in News Times features a woman from Connecticut caring for her 80-year-old husband dealing with the disease. While Medicare covers a portion of his medical expenses, they have decided to forgo medications and frequent doctor’s visits for alternative methods. However, she knows that the expenses are heading in a direction that their nest egg will not be able to keep up with.
Their story is just one example of how pressing an issue this disease is in the country. So many Americans are facing the same struggles brought about by Alzheimer’s and the expenses that come with it. Alzheimers Reality: Financial and Family Dynamics

Its Effect on the Nation

The projected care costs this year for Alzheimer’s and other forms of dementia is at $236 billion—a figure that Medicare is expected to fund about half of. If you take into consideration the number of baby boomers turning 65, the number of individuals with Alzheimer’s is expected to grow in the coming years. Plenty of these individuals will have to depend on government programs to assist them in paying for the care that they need. But with the growing demand, Medicare may find itself on the verge of bankruptcy. Additionally, costs will likely increase even more.

How to Avoid the Difficulties

The importance of planning cannot be stressed enough. While it may sound overused to the point that it no longer holds much weight, individuals and families will benefit immensely from early planning.
Not many people realize how necessary having a comprehensive plan truly is until after the disease becomes their new reality. We read the accounts, and we see it happening every day, each person is just one diagnosis away from a completely different life.
Speak with a professional about it, and weigh each of the options presented to you. There is an abundance of long term care information online that you have access to, so learn as much as you can, as well. What matters is that you begin planning as early as you can and as best as you can.

Alzheimers Reality: Financial and Family Dynamics

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Budgeting Long Term Care
Health Insurance

Budgeting Long Term Care

by Kimberly Johnson
written by Kimberly Johnson

Budgeting Long Term Care

Budgeting Long Term CareLong-term care costs are an x-factor many people simply do not think about when budgeting their retirement. The odds you’ll need some form of long-term care, however, are surprisingly high. According to longtermcare.gov, 70% of people turning 65 should expect to use some type of long-term care in their golden years. Budgeting Long Term Care
As calculated by Genworth financial, a semi-private room in a nursing home for 2015 cost an average of $80,300. When it comes to finances, seniors are generally on a fixed income, so how can a senior account for such an exorbitant cost? Well, if you plan ahead, there are a few options worth considering.

Medicaid:

While Medicaid is a great option, it’s not applicable to everyone. They have very strict financial and medical rules. Each state has individual guidelines, so check out this guide for your state’s limits and restrictions. Generally, Medicaid allows $2,199 a month in income and $2,000 in assets. The medical portion is determined by whether or not an individual needs care at the nursing home level. If you do qualify, you will not have out-of-pocket costs, but you must choose a care home that has an agreement with the state.

Qualified Income Trust:

If you do not qualify for Medicaid because your income is too high, you can open what is called a qualified income trust, income only trust, or Miller trust. Some states allow you to simply spend the extra money down towards medical care, while others make you create the Miller Trust. It depends whether your state is an income cap state or a medically needy state. Qualified income trusts allow a person to qualify for Medicaid even if their income is beyond the limit, usually around $2,000 per month. For example, if you make $2,600 a month and your state’s limit is $2,000, all money under $2,000 will go towards care, the state will keep the excess, and you will still qualify to receive Medicaid benefits.
Essentially, the creation of a qualified income trust is the state’s way of getting paid back for care and living expenses. The problem with medical spend-down or a qualified income trust is that, for the most part, all income goes towards care, leaving little behind for loved ones. If you’re not concerned with leaving a legacy, this is a great option because the cost of care will be taken care of; placing no financial burden on loved ones.

Reverse Mortgage:

Within the last few years, reverse mortgages have slowly gained in popularity. While not complex, this type of loan doesn’t work for everyone. A reverse mortgage is a loan borrowed against a house’s equity. Rather than making monthly payments, as you would with a normal mortgage, the bank reversely pays the homeowner each month. Essentially, the bank is slowly buying the house. If the borrower moves into a care home or dies, then the bank takes ownership of the home. If a homeowner is pretty healthy and wants some more money for retirement or in-home care, then this could be a decent option. If you are trying to leave your house behind for loved ones then this choice will not work. See a detailed list of pros and cons here.

Long-term Care Insurance:

If you are young and thinking ahead, one way to afford long-term care is to purchase a long-term care insurance plan while you are still healthy. A healthy 55 year old can find an affordable policy that provides adequate coverage. Once a life change occurs, such as a stroke or a fall, it becomes nearly impossible to qualify for long-term care insurance. Long-term care insurance pays for long-term care in the event that the policyholder needs it.
As mentioned above, Medicaid long-term care has a very strict qualification process, but many states offer what is called a long-term care insurance partnership. For example, if the policy covers $350,000 worth of care and that money is spent through, the policyholder can now apply for Medicaid with $350,000 worth of assets exempted during the qualification process. This is perfect for people who want to leave a legacy behind, but also need to qualify for Medicaid.
 
Max Gottlieb is the content manager of Senior Planning and ALTCS in Phoenix, Arizona. While not affiliated with any long-term care insurance provider or Reverse Mortgage brokers, Senior Planning receives many questions on these subjects. Senior Planning and ALTCS give free assistance to seniors and their families, helping them navigate the often-complicated process of finding benefits or care.
 
 

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