A major decision

by Mary Rose McBride

At Lifespan, we get the following question almost every day:  “I am a middle-aged, single, working woman whose grandmother and mother had Alzheimer’s disease. I could be a perfect candidate for a long-term care insurance policy. But why would I want it?”

Good question.  And you’re smart to ask. 

Long-term care insurance is an option that can preserve your assets, provide peace of mind, and save Medicaid dollars. Perhaps the best reason to consider it is the greater choices you could have in the level of care received based on the type of policy you purchase.  However, long term care is not the right option for everyone. It is a complicated product that requires substantial investment. 

Long term care insurance is an alternative to using your income and assets or relying on Medicaid (i.e., the taxpayers) to pay for nursing home or in-home care. In New York State, Medicaid expenditures are breaking the bank.  A major reason is that Medicaid pays the bill for 75% of New York State’s 107,000 nursing home residents. With the aging of baby boomers, it is clear that unless more of us have another way to pay for institutional care, Medicaid expenses will skyrocket beyond our ability to tax. In addition, Medicaid was created in 1965 to cover medical costs for indigent people, so you basically have to impoverish yourself to qualify.

Long-term care insurance is fairly new to the market; it was first offered in the 1970s. Today, the best policies provide coverage for nursing home care, as well as care at home, care within an assisted living facility, adult day care, and even respite care.

Like any insurance product, your premium depends on the coverage you select and your age upon purchase. For example, when purchasing long-term care insurance, you buy a certain daily benefit (e.g. $300 a day), a certain maximum time period (e.g. two years to lifetime), and a specific waiting period until the policy takes effect (e.g. 30–180 days). The younger you buy it, the lower your cost, and the premium cannot increase as you get older or your health changes. 

Having a policy in place also can provide you and your family with much-valued peace of mind in difficult times. Far too often families call Lifespan in crisis when they are faced with a nursing home placement that costs $8000 to $9000 a month. It can also ensure that you have a greater choice of services or facilities.

Many variables play into a long-term care insurance purchase decision. Your age and medical history are factors. Wait too long and policies become expensive (in the $5000 a year range for a 75-year-old). Wait too long and you may not qualify medically. One in four 65-year-olds is turned down for coverage. Lifespan recommends working with a broker who can give you more than one insurer option and take your individual situation into account.

Lifespan is happy to provide advice to those considering this product.  We are part of the New York State Long-term Care Insurance network of resource centers. We provide nothing-to-sell educational seminars and/or personalized consultations about long-term care insurance. So call Lifespan today at (585) 244-8400 for information, guidance, and policy comparisons.