Business

The statistics do not lie – nearly one in two over the age of 65 will need some form of long term care medical assistance. The average nursing home stay is approximately three years and the cost can be anywhere from $30,000 to $90,000 annually. A three year stay in a nursing home in an average priced facility could cost over $210,000. At the same time, the federal and state governments are enforcing recent law changes regarding Medicaid. These changes make it more difficult than ever to qualify for Medicaid benefits.

Relying on Medicaid is no Longer a Viable Solution for Most Estates The passing of the Deficit Reduction Act makes clear that government entitlement programs will no longer pay for fiscally able consumers. Individuals and families trying to avoid privately paying by giving away or hiding assets are unlikely to qualify for Medicaid. The look back period has increased from 36 to 60 months and gifting assets to family will only delay any Medicaid benefits you might receive therefore negating the gift itself. Medicaid only allows $500,000 in property value and will attach a lean to your property to recuperate its outlays.

Additionally, utilizing so-called Medicaid friendly insurance products, like annuity and life insurance policies, to shelter wealth is becoming increasingly difficult. Yes, there are qualified attorneys who specialize in Medicaid crisis planning and there are some measures which can be implemented to protect a portion of your assets. However, there is no substitute for pre-planning when it comes to long term care.

Why Don’t More Seniors Insure Against Such Potentially Large Expense?
With all of this information available, why aren’t more healthy seniors purchasing some form of coverage? The answer to this question is somewhat complicated. Most seniors know very little about the Deficit Reduction Act and the means by which it will make Medicaid benefits more difficult to obtain. Also, consumers do not wish to purchase any more insurance than what they already own. And many erroneously believe that Medicare, a Medicare supplement plan, the Veterans Administration or their previous employer will pay for their care.

Another frequent and legitimate complaint concerning long term care insurance is the
cost. With potential outlays of hundreds of thousands of dollars in benefits and the
likelihood of a claim against the policy, premiums charged by the insurance company can be more expensive than your average health insurance policy. In addition, many
consumers do not like to pay into something they may get no benefit from. (Although,
the best insurance policy might be the one never used.)

Many seniors simply state they will self insure, especially those with larger estates. An estate worth hundreds of thousands of dollars or more has the most to lose, but the means to insure against this loss. A analogous scenario is a major claim against a highly valued home. This event is less than half as likely as long term care claim, yet wealthy households always carry homeowners insurance. Never will clients explain that they choose to self insure against a claim on their valuable home. It really does not make much sense. It may be that seniors do not want to address the possibility of extended poor health and the need for care in a facility.

Why Do Consumers Wait to Purchase?
Unfortunately, many consumers wait until their health has deteriorated to apply. You
must remember that you are purchasing health insurance and that requires underwriting. Traditional health insurance has the most stringent underwriting, while hybrid policies usually involve simplified underwriting. If you are in poor health, it is unlikely that you can purchase any type of policy.

If you are serious about receiving quality health care while protecting your estate for yourself and you loved ones, you must investigate insurance coverage when you are least likely to need it. Simply put, you cannot bump into another car and then start looking for car insurance.

You Must Plan for Your Own Long Term Care
Recently, insurance companies have developed benefit rich long term care insurance
policies. Newer policies have more benefit to the insured and to the beneficiaries of the insured, but still provide ample long term care coverage if needed. Long term care policies have been combined with annuity and life insurance contracts to offer a more appealing package to the consumer.

Additionally, policies will pay for care in the insured’s home even if the care is administered by a family member. Insurance
companies also offer policies with a return of premium rider to the insured. The fact is that long term care insurance has been vastly improved over the last ten years. More choices, reasonable premiums, living benefits to the insured and wealth transfer to the estate of the insured make this coverage very practical for many.