by Rick Blaine » Thu Jul 20, 2006 01:47 pm
LTCI, Long Term Care Insurance, is it as expensive as some have lead the masses it is? The media, such as articles in newspapers or tv that do stories of insurance usually gets it all wrong! Yet lets examine this just a tad?
LTCI, can be expensive, yet it isn't that expensive. First you have the "Tax Qualified Plans". The difference is, to collect you'll need a medical doctor to state you'll need 90 days or more in assistance with 2 or more ADLs (activities of daily living): The things we normally do in daily living including any daily activity we perform for self-care (such as feeding ourselves, bathing, dressing, grooming), work, homemaking, and leisure. The ability or inability to perform ADLs can be used as a very practical measure of ability/disability in many disorders.
Now when you first look for plans you'll discover a wide menu of options, any one option can be very intimitating and create a feeling of confusion! I'll go into each seperately but for now lets say it is this simple. You in the end are basically buying into a "pool" of money that you can pull from if the need arises. Bigger the pool, bigger the premium. All the options you'll have to know and pick from will influence directly the pool of money. May it be the elimination period, length of benefits, inflation protector, daily or monthly amount, etc etc..
Now do drive the price down, first understand that you can deduct the a certain amount up to quidelines that the IRS allows. Then you can get a "Good Health" discount, along with Spousal discount (can range from 15% if one spouse is disaprove or 40% if both applies and are excepted), then you have family discounts, where 3 or more people some how related go on the same plan and share the pool of money. You have groups, one that is an option to member of groups such as a small business as long as 2 or more commits and qualifies for a LTC Plan.
So if one gets a 40% savings and then has the tax deduction, the plan could very well be cheap as any insurance you ever paid for! Of course depending on your age, best to buy now when and if you are young then to wait till you are in your 60's, it'll be pricey then but well worth it. Also it does greatly enhances your wealth, most people that file bankruptcy will do so over medical cost. Some States such as NY and others are expected to follow, states if you have LTC, minimul plan at that privately held, once that is ran dried or out of money and you need to go onto the Medicaid Roles you are exempt from Spend Down! That is great, and I do hope more states esp. mine follow suit!
LTCI, can be expensive, yet it isn't that expensive. First you have the "Tax Qualified Plans". The difference is, to collect you'll need a medical doctor to state you'll need 90 days or more in assistance with 2 or more ADLs (activities of daily living): The things we normally do in daily living including any daily activity we perform for self-care (such as feeding ourselves, bathing, dressing, grooming), work, homemaking, and leisure. The ability or inability to perform ADLs can be used as a very practical measure of ability/disability in many disorders.
Now when you first look for plans you'll discover a wide menu of options, any one option can be very intimitating and create a feeling of confusion! I'll go into each seperately but for now lets say it is this simple. You in the end are basically buying into a "pool" of money that you can pull from if the need arises. Bigger the pool, bigger the premium. All the options you'll have to know and pick from will influence directly the pool of money. May it be the elimination period, length of benefits, inflation protector, daily or monthly amount, etc etc..
Now do drive the price down, first understand that you can deduct the a certain amount up to quidelines that the IRS allows. Then you can get a "Good Health" discount, along with Spousal discount (can range from 15% if one spouse is disaprove or 40% if both applies and are excepted), then you have family discounts, where 3 or more people some how related go on the same plan and share the pool of money. You have groups, one that is an option to member of groups such as a small business as long as 2 or more commits and qualifies for a LTC Plan.
So if one gets a 40% savings and then has the tax deduction, the plan could very well be cheap as any insurance you ever paid for! Of course depending on your age, best to buy now when and if you are young then to wait till you are in your 60's, it'll be pricey then but well worth it. Also it does greatly enhances your wealth, most people that file bankruptcy will do so over medical cost. Some States such as NY and others are expected to follow, states if you have LTC, minimul plan at that privately held, once that is ran dried or out of money and you need to go onto the Medicaid Roles you are exempt from Spend Down! That is great, and I do hope more states esp. mine follow suit!
Posted: Fri Jul 21, 2006 08:44 am Post Subject: Spend Down
Asset spend-down in nursing homes is the process by which individuals enter nursing homes as private pay clients, deplete their available assets in paying for their care, and then enroll in the Medicaid program once they are impoverished. "Medicaid asset spend-down" is a source of considerable concern to disabled elderly persons who face the prospect of extended nursing home care. It is also a matter of considerable concern to State Medicaid programs, since Medicaid indirectly "became" a safety net for middle and upper class individuals who incur catastrophic nursing home costs.
Became, this isn't the original idea behind Medicaid. Medicaid was at its beginnings a Safety Net for the Poor. This year the congress and with the president's signature have enacted tougher regulations concerning Medicaid and spend down is next to impossible without giving up practically all financial property. This was done nor does anyone believe the actions of the Government is over in the concerns of protecting our budget from an ever increasing cost of Medicaid.
Yet I'm sure the tax qualified LTCI will recieve even a greater tax favorable status and limits.
Posted: Fri Jul 21, 2006 09:29 am Post Subject: What Is Long-term Care?
Long-term care is a range of custodial, social and medical services provided to those who can no longer live independently. They may need the care because of illness, accident, injury or aging.
There are two reasons to need long-term care (LTC):
1) You have cognitive impairment (mental impairment with a physical cause, such as Alzheimer's, Parkinson's, stroke or head injury) and need someone to supervise you; or
2) You need assistance with "Activities of Daily Living" (ADLs). There are six ADLs: Bathing, continence, dressing, eating, toileting, and transferring. Transferring means getting in and out of a bed or chair.
Long-term care is different from "acute care." Acute care is health care. It is received from a doctor or hospital because of illness, disease or injury. The goal is to cure. Health insurance pays for acute care.
The objective of LTC is "caring rather than curing." Most people needing long-term care need it for the rest of their lives.
95% of LTC is "custodial care." Custodial care includes assistance with Activities of Daily Living and supervision needed by those with cognitive impairment. Not all long-term care is custodial but all custodial care is long-term care.
Custodial care also includes homemaker services (cooking, cleaning), chores (fixing your house, mowing your lawn), companionship, help with medications and other services.
Non-custodial care is usually skilled care, provided by nurses and speech, physical and respiratory therapists.
Long-term care is provided in homes, assisted living facilities, adult day care facilities, hospices and nursing homes.
Not just the elderly who need LTC,:
40% of those receiving long-term care are working-age adults ages 18-64.1
One out of every three stroke victims is below the age of 60.2
Medicare and private health insurance do not pay for long-term care, although they may pay for some short-term care.
LTC is expensive. In the Knoxville, TN area:
Good nursing homes cost $60,000 to $100,000 or more per year.
Good assisted living facilities cost $26,000 to about $60,000 per year.
Home care costs vary. Nursing assistants, home health aides and companions charge $10 to $20 per hour.3 Geriatric care managers charge $80-100 per hour. A visit by a nurse to change a catheter or dressing costs more.
Forecasting home care costs is difficult. Someone who needs assistance getting out of bed, taking a bath and getting dressed each morning needs a non-skilled person for a relatively short period of time. At $14 per hour, four hours cost $56 per day.
Someone requiring 24 hour supervision might pay $336 a day ($123,000 per year). Additional care by nurses and therapists can drive home care costs as high as $500 per day!
Posted: Fri Jul 21, 2006 10:11 am Post Subject:
My Dad is 63 and had spent a large part of his life on social security income. I'm thinking of getting him a long-term care now. Would there be any possibility that he gets turned down ? by the way I'm 37 , so do you think its time for me to go for the same at once ? for your information I'm residing in aspen ave, colorado springs (CO) and i manage to make around 45-50% savings. Since you have stated that its possible for more than 3 in a family to share the family discounts, I'd love to know if that could be shared by all the members in my family of 5 (and that includes my dad too), the other members being my wife and our two daughters both below 18.
Posted: Fri Jul 21, 2006 11:28 am Post Subject:
My Dad is 63 and had spent a large part of his life on social security income. I'm thinking of getting him a long-term care now. Would there be any possibility that he gets turned down ? by the way I'm 37 , so do you think its time for me to go for the same at once ? for your information I'm residing in aspen ave, colorado springs (CO) and i manage to make around 45-50% savings. Since you have stated that its possible for more than 3 in a family to share the family discounts, I'd love to know if that could be shared by all the members in my family of 5 (and that includes my dad too), the other members being my wife and our two daughters both below 18.
As far as your Dad, yes he would need to go through underwriting before exceptence in any private LTCI Contract. If your dad is on SSDI (Social Security Disability Income) he could be facing a tough time or high premiums. Yet though, in a family plan he could save as much as 10% and you can achieve as much as 40% if you and your wife applies and are excepted. If one spouse isn't excepted the other would generally get about 15% discount. Your father would also have up to a 2000 dollar deductible you would have about 900 tax ded. times two you and your wife.
I would need to know about your fathers medical problems before I would guess he would fair in underwriting of a LTCI Policy. Yet though there are other avenues, such as Critical Care by Golden Rule involving a W/L Contract that enables the use of the DB as a living benefit in the case of LTC needs. Or Annuities that have specific LTC provisions, on that often I advice a Senior Attorney Specialist, usually the person would need some sizeable savings to take advantage of it. Yet if your father has basically nothing to protect financially it would probably be best to lapse into Medicaid if he already on the SSDI System.
Yet though, on you and your wife. If you decide which you should on LTCI sit down with a Independent Agent, make sure he has some expierence and do a complete Insurance Review! The idea of LTC is protection of assets and having your choice of LTC needs in the future. Like Home Care with private nurses or above average Nursing Home Care Centers including Assited Living, there is a big difference between facilities that cater to Medicaid or Private Funding! I'm sure you heard horror stories or even expierence such stories in people you know.
As far as children under 18, you'll have the opportunity to pick ryders to cover them that will expire once they turn 18-24 depending. Then they can enter the group as adults.
Posted: Fri Jul 21, 2006 01:43 pm Post Subject:
I started a page on my blog about this thread and added a personal story I'm going through now. You're more then welcome to post there also!
http://rickblaine.ampminsure.org/2006/07/21/my-situation/
I would love to hear your stories about long term care you might be involve with or talk about it there if you would like to do so.
Posted: Thu Jul 27, 2006 08:11 am Post Subject:
Thanks Rick for the guidance.
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