Long-Term Care Insurance? Absolutely!

People are living longer than expected. They haven’t planned on it or the costs associated with medical care for chronic conditions or help around the house for daily living – housekeeping, grocery shopping, meals, mobility, and more. Here is why it is worth considering long-term care insurance. Longer life spans and associated health and medical care costs exceed projections, impacting private insurers and governments. Last year, for example, California reported that it’s CalPERS long term care program was going broke and so it was going to double the cost of premiums and give policyholders a deadline to declare if they were going to keep their plan and pay the higher cost – or drop their coverage. Many states are looking for ways to keep Medicaid costs lower by encouraging ways that keep seniors in their home. Jenni Bergal’s article for The Pew Charitable Trust on “Money, Personal Preferences Push States on Long-Term Care” elaborates on how states are experimenting with a range of solutions that address the looming long-term care financial crisis. In the past, most Medicaid coverage for long-term care was for institutionalized care, but that is shifting because people prefer and find it less expensive to remain in their homes. I particularly like what more than a third of the states are offering: Miller Trusts. According to a 2015 Kaiser Foundation report (Appendix Table 7), thirteen states offer Miller Trusts, a separate bank account for medical or other approved expenses, which allow residents whose income exceeds the threshold for Medicaid eligibility and who want to get care in their homes. The states exclude that money when determining whether residents are needy enough to qualify for Medicaid in-home services, which can allow people to stay in their homes longer. Cost control measures are needed. Studies by the Public Policy Institute of California and University of California – Berkeley show the rising older adult population and chronic illnesses of boomers will break the budget as it tries to meet the long-term care needs of its residents. Families and individuals need to plan for this new reality. They may need to work longer, save more, and get long-term care insurance. CareLinx has long encouraged families to purchase long-term care protection because long-term care is expensive and can quickly draw down and exhaust a family’s finances. Now is the time for families to research, make plans, and take action on long-term care. Whenever I’m asked if long term care insurance is a good investment, I say “absolutely!”

CEO Sherwin Sheik