The Overlooked Reality of Getting Older

Lynn Peterson

Account Executive

David Martin Agency, Inc.

lpeterson@davidmartinagency.com

Topic: Healthcare

It should come as little surprise that most of us know of an individual who is currently residing in a nursing home, an assisted living facility, receiving home health care or adult daycare. There are many of us who are, or will be, caretakers for a loved one with diminished capacities.  We take care of mowing the lawn, paying the bills, doing laundry, cleaning the house, driving to/from medical appointments, church, shopping, etc.; tasks that go beyond simply 'helping out', but actual caretaker duties.

Taking care of another individual is costly, regardless of their age.  Choosing long term care (LTC) can be very expensive and quickly drain whatever savings we have accumulated within our lifetime.  We assume that LTC is just for those individuals who are in 60+ years.  In actuality, over 40% of people who are currently receiving LTC are between ages 18-64.

What does it truly cost for LTC?  In Minnesota, the average rate for a licensed home health aide is $57,200 per year.  For a semi-private nursing home room, it costs a whopping $67,000 per year. These costs are estimated to more than triple in the next 30 years. 

It is scary to think of a future where our 401(k) or savings would be drained because of LTC.  How do you plan budget and plan for these potential costs?  How do you help ensure that you or someone you love has peace of mind and freedom of choice when they are faced with LTC choices?

The fact of the matter is that it is too soon to tell what sort of coverage the federal government's CLASS LTC Act (part of the new Health Care Reform legislation) will provide.  We already know that LTC is considered custodial care and is not covered, or has limited coverage under medical, disability or Medicare.  To use public assistance, you need to be considered impoverished unless you have certain LTC insurance which enables you to protect more of your assets. Other choices must be made available.

Thankfully, individuals have an option to purchase private LTC coverage like they would life insurance or long-term disability coverage. Costs for LTC coverage are based on purchase age, health/marital status, benefit amount and duration.  The truth is the younger the purchase age can equal a lower premium and the possibility of a better chance of qualifying for coverage.

There are also several advantages to purchase coverage in a business setting.  A company can qualify for group rate discounts, guaranteed coverage, portability and possibly tax advantages. Minnesota residents can even receive a tax credit to lower the net premium. Talk to a financial professional about the features and benefits of private Long Term Care coverage.  As with retirement, it makes sense to take care of our future.

Resources:

• www.longtermcare.gov
• www.medicare.gov/LTCPlanning
• www.medicare.gov/LongTermCare
• www.dhs.state.mn.us/main/idcplg
• www.genworth.com/content/products/long_term_care
• U.S. Department of Health & Human Services, "Own Your Future" LTC Planning Kit