Is Long Term Care For You?
Ok, let’s face it. Long term care insurance is here to stay. But it’s not the best choice for everyone.
What is long term care insurance? It is a mechanism that will help fund long term care (nursing home) expenses. The theory works like this: you purchase an LTC policy when you are healthy and young. The premium is paid over a number of years and creates a pool of money that you can tap if you need long term care that is over and above what Medicare would pay.
To qualify for care in a skilled nursing facility, your doctor must certify that you need daily skilled care like intravenous injections or physical therapy. Medicare doesn’t cover long-term care or custodial care in this setting. This accounts for 95% of the care provided in a nursing home.
Now I bet you’re saying, Mike, what about Medicaid. Medicaid will pay for custodial care. That they will. There are some things you need to consider:
1) You can only have limited assets (may vary by state so check your local Medicaid requirements.)
2) Any assets transferred to family members must have been 10 years before entering the Medicaid program.
3) If you have a spouse and/or children living in a house that is owned by you and your spouse, your spouse will be allowed to live in the house, but 1/2 of the home will have a lien by the Medicaid program to offset what they’ve paid for your care.
Any of those sound like a good deal? Let’s face it, there is no way around paying for long term care. It’s basically pay now or pay later. With states acknowledging the increasing problem with Medicaid being put on the hook for LTC costs, a product was created to help fill the gap: Partnership Long Term Care coverage.
PLTC allows you to purchase insurance to offset a part of the assets that Medicaid will have to liquidate when and if you need to go on the program. Benefit to you is that you can choose how many assets you want to retain by purchasing insurance, which can keep the total value of your home in your estate and not in the state’s coffers.
The problem is that not all states have implemented programs yet for Partnership policies. Check with your insurance agent to see if your state has implemented the program. It is hoped that with changes in health care in Washington, all states will find ways, like PLTC products, to preserve the capital they will receive for their Medicaid programs.
Whether your state is a partnership state or not, long term care insurance can be a good investment. Contact your agent today to find out more.