Need for Long-Term Care Insurance

Separating FICTION from FACT

 Few people are prepared to handle the financial burden of long-term health care. 
In fact, many people have a false sense of security when it comes to long-term care.

FICTION FACT “Medicare and my Medicare supplement policy will cover it.” In fact, Medicare and “Medigap” insurance were never intended to pay for ongoing, long-term care:

• Only about 12% of nursing home costs are paid by Medicare, for short-term skilled nursing home care following hospitalization.  (Source: AHIP, A Guide to Long-Term Care Insurance, 2004)

• Medicare and most health insurance plans, including Medicare supplement policies, do not pay for long-term custodial care.  (Source: Medicare & You 2011, Centers for Medicare & Medicaid Services)

“It won’t happen to me.”

• About one-third of individuals turning 65 in 2010 will need at least three months of nursing home care, 24% more than a year, and 9% more than five years.  (Source: What Is the Distribution of Lifetime Health Care Costs from Age 65?, Center for Retirement Research at Boston College, March 2010)

• Women have a longer life expectancy than men…about 71% of nursing home residents are women. (Source:  CDC Vital and Health Statistics, Series 13, No. 167, June 2009)

 “I can afford it.”

• As a national average, a year in a nursing home is currently estimated to cost $83,585.  In some areas, it can easily cost $100,000 or more!  (Source:  2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs)

• The average length of a nursing home stay is 835 days.  (Source:  CDC Vital and Health Statistics, Series 13, No. 167, June 2009)

• The average cost of an assisted living facility in the U.S. was $39,516 per year in 2010. (Source: 2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs)

• Home health care is less expensive, but it still adds up.  Bringing an aide into your home for 20 hours a week easily can cost $1,800 each month, or $21,000 a year. (Source: 2010 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs)

“If I can’t afford it, I’ll go on Medicaid.” Medicaid, or welfare assistance, has many “strings” attached and is only available to people who meet federal poverty guidelines.

Whether purchased for yourself, your spouse or for an aging parent, long-term care insurance can help protect assets accumulated over a lifetime from the ravages of long-term care costs.  Please contact my office if you're interested in discussing possible long-term care funding solutions.

In thinking about our Fall Seminar Schedule, we may be offering a session specifically geared towards Medicare Facts & Fictions. If this is something you are interested in, please let us know now so we can get you on our interested pre-registration list.