LONG TERM CARE INSURANCE CAN MAKE HOME CARE EVEN MORE AFFORDABLE

Tax time is a great time to focus on financial planning, so be sure your financial strategy includes planning for Long Term Care needs. Most people discover the truth about what Medicare and Medicaid DON’T cover too late in the game. Get educated about Long Term Care Insurance and why you need it.

You have probably already heard the statistics: 70% of people over age 65 will require some type of long-term care services, whether provided in their own home, an assisted living facility or skilled nursing facility……and that they will need care for 5 years or more. If you don’t plan ahead, Long Term Care (LTC) can be shockingly expensive.

Medicare does not help pay for assisted living services or help with the activities of daily living (ADL). Seniors can find themselves in a dilemma if they need help with ADLs like dressing, bathing, eating, ambulating or using the bathroom. Medicare covers services only for a short time – typically just long enough to get the patient back on their feet after an illness or injury. Medicaid does cover LTC services, but is essentially a program for people with low incomes and limited resources. You may not want to spend down assets to qualify, or irrevocable trusts may not be an attractive option.   

The annual bill for a semi-private room in a skilled nursing facility in Florida can cost nearly $95,000 (based on Genworth 2017 survey). But expect to pay only about $45,000 annually for a private aide to provide 8 hours a day of care in your own home,* which is a much more affordable option, and one that most folks prefer to an institution. The best time to start financial planning for long-term care costs is in your 50s, when eligibility for Long Term Care Insurance (LTCI) and other financial products is high. Later in life you might become uninsurable due to medical issues and financial restraints.

LTCI reimburses policyholders a set amount to cover the costs of long term care received at a skilled nursing facility, an assisted living facility (ALF), or in-home healthcare services. Most long-term care services are NOT covered by any other kind of insurance, including health insurance, long-term disability insurance, Medicare, or Medicare supplemental coverage.

Finances aren’t the only thing at risk. Long-term care takes a tremendous toll, physically and emotionally, on your family members if they are expected to care for you. Remember children often move away, or a spouse can become cognitively or physically impaired and not able to care for you any longer.

Decisions about Long Term Care (LTC) for a loved one can be emotionally and financially draining if there has been no prior discussion or provision made in advance for uncovered healthcare services. It is terrible when a family must make decisions about the care of a loved ones during a medical emergency, when a family member suddenly suffers a heart attack, stroke, or is diagnosed with severe illness, disease, or dementia.

LTCI is a tool that can help preserve and protect financial assets, provide flexibility for the type of care you want and where care is received, and help to ensure high-quality care while providing financial and emotional security for the family. Options include a facility services only policy or more comprehensive policies which offer in-home and community based services as well as those for respite care. An experienced insurance specialist can guide you through the complex web of elimination periods, or daily benefits compared to a lifetime benefit or benefit pool. The policy should be tax-qualified so premiums may be deducted under medical expenses if deductions are itemized. Consider choosing an inflation-adjusted policy.

Tax breaks are not why you purchase a LTCI policy, but a qualified policy lowers the effective cost and makes better coverage more affordable. A licensed, private duty home health agency will tailor a plan of care for each individual’s healthcare needs providing optimal long term care in the home while maximizing available LTCI benefits.

Take into consideration that there are cost effective ways to fund a LTCI premium such as a tax free 1035 exchange. Keep in mind that life insurance companies have recently introduced hybrid products which include innovative riders to life insurance or annuity policies that allow you to receive your death benefit early as a long-term care benefit.  If you are still healthy, you may be able to upgrade your existing life insurance coverage into a policy with LTC benefits. If you are married, there can be premium savings, or access to pooled benefits.

In conclusion, get educated: understand the different types of long term care available, make a plan with help from a financial advisor and insurance expert. Do not wait to plan for long term care until you are ineligible for the best options or experience a medical emergency! Use the services of a reputable private duty home health services provider like Visiting Angels that will customize a plan of care to maximize your LTCI benefits. Don’t assume that by financially budgeting for long term care you won’t be able to leave any assets to your children or favorite charity.

We serve Palm Beach Gardens and the surrounding area: Jupiter, Tequesta, Juno Beach, West Palm Beach and Wellington.

Till next time!

Irv Seldin, JD

Owner and CEO of Visiting Angels of the Palm Beaches

This article is not intended as medical, financial or legal advice.

* Based on 44 hours per week by 52 weeks