Don’t Wait To Get Started On Long-Term Care Policys

If shopping for insurance isn’t on your things-to-do list for today, you’re not alone. For most people, insurance is at best a necessary evil. But if you have assets you’d like to protect and especially if your estate is worth $100,000 or more, long-term health insurance is worth thinking about. Long-term care policies provide coverage if you are disabled and need adult care in a nursing home. Most policies start paying benefits when you need help with two or three activities of daily living, such as bathing, dressing, eating, or walking. Usually, a diagnosis of Alzheimer’s disease will also start benefits.

And the chances are excellent that you will need long-term care. According to the U.S. Department of Health and Human Services, 40 percent of all Americans over age 65 will enter a nursing home at some point. Half of those people will stay an average of 2½ years—at an average yearly cost of $35,000—with some nursing homes costing much more. If you don’t have the right insurance, that’s a big bite out of your estate.

Many other seniors will never go into a nursing home but will still require help—often on a part-time basis—to continue living in their own home. In the Tucson area, in-home senior services currently cost up to $18.00 an hour.
What’s my interest in telling you all this? I run an adult home care agency. Agencies such as mine provide screened, trained caregivers to work in your home. The insurance you buy now might make it possible for you to use my services later on. It can also preserve your estate for better uses; like taking that dream cruise, for instance.
You can’t count on government programs to meet your needs for long-term care. Medicare covers short-term acute care needs such as hospital and doctor bills, skilled nursing and therapy services in your home, and a limited stay in a skilled nursing facility. But most long-term care does not qualify for Medicare payment. Even “Medigap” policies—the kind you buy to fill in gaps in Medicare—don’t cover long-term care.

For someone who’s worked a life-time to build a substantial nest egg, having to rely on Medicaid or the Arizona program can turn a dream into a nightmare.

That leaves Medicaid or its Arizona equivalent, the Arizona Long-Term Care System. These senior programs do pay for nursing home care, but not until you’ve spent your assets down to a level set by the government. To qualify for care under the Arizona system, an individual can have no more than $2,000 in assets; the spouse of a person in a nursing home, no more than $74,820. Monthly fixed income is limited to no more than $1,374 for an individual or $2,748 for a couple. For someone who’s worked a lifetime to build a substantial nest egg, having to rely on Medicaid or the Arizona program can turn a dream into a nightmare.

So how do you shop for the right insurance? “Go with major companies when you choose an agent and an insurance company,” says Steven Gootter, a Tucson-based financial planner and independent insurance executive. “You want a company that will come through with what they’ve contracted for. The last thing you want is excitement around claim time.”

Make sure the person who represents the policy explains it to you completely. “You need to know what it takes to trigger benefits,” Gooter says. “The definition of ‘disabled’ is critical, since it varies from company to company.”
And plan for the future. “Buy young to protect your insurability,” Gooter stresses—before health problems lock you out of the market and while premiums are low. A policy started at age 65 could cost you five times as much per year as the same policy started at age 45. A typical policy started at 65 might cost $2,000 a year; the same policy started 10 years later could cost well over $5,000 a year—if your health is still good enough for you to qualify.

One of the best ways to get started is to pick up a copy of “A Shopper’s Guide to Long-Term Care Insurance.” Published by the National Association of Insurance Commissioners, this handy booklet doesn’t push any particular brand of insurance. It’s free from any company offering long-term care policies. The guide explains in plain English why long-term care insurance might—or might not—be for you. It also translates the jargon and lists the tough questions you need to ask when you shop for a policy.

Other good sources of information:

Pima Council on Aging
5055 E. Broadway, Suite C-104,
Tucson, AZ 85711, 520-790-7262

Insurance Depart. Consumer Assistance Unit
400 W. Congress St., Suite 152
Tucson, AZ 85701, 520-628-6371

Shopping for insurance isn’t as much fun as playing with the grandkids, but investing now in a long-term care policy might be the smartest thing you can do to keep your golden years shining.

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