Darien, IL (PRWEB) December 7, 2005
You see news stories about long-term care and long-term care insurance all the time. This makes a lot of sense since long-term care is a major public policy issue facing the western world. People are living longer due to the advances in medical science. Medical conditions that used to mean death, no longer mean death, at least right away. The problem is today we linger. People end up requiring help with activities of daily living, otherwise known as "ADL's". This help, no matter if done in a person's own home, adult daycare, assisted living or nursing homes, is expensive.
Health insurance and Medicare will pay for a small amount of this care (up to a 100 days in most cases). This leaves the remaining amount is your responsibility, comes out of pocket, or you force family to take care of you which brings about a whole bunch of other problems.
"Much of the information written about this issue makes you want to shake your head in disbelief," said Matt McCann, a well known speaker on long-term care issues and an Illinois based expert on long-term care insurance.
This time of year many people start talking with spouses and children about long-term care or discuss the issue with financial advisors. When looking at articles about this issue remember some articles have incorrect information.
"Don't expect the federal or state government to pay for your long-term care," McCann says. While you will read articles that suggest this might happen, McCann says demographics and cost prohibit it.
"There is a reason why the federal government has been pushing the idea of private long-term care insurance. Lawmakers on both sides of the aisle know the government does not have the money it would require because of the numbers involved," McCann said.
The Medicaid program is for the poor and was never intended to pay for long-term care services. However, the program is spending millions on long-term care since so many people are forced to spend down assets to pay for these service and they end up poor.
Another item which makes no sense is when a writer suggests that if you have a million or more in assets you don't need to consider long-term care insurance.
"This make no sense at all," McCann says, "paying a small amount for a premium which will pay for care with tax free money is just common sense compared to risking hundreds of thousands of dollars of your own money to pay for future care," he said. "Not one person would consider self-insuring their home or car, for example, and those risks are much smaller than the risk of needing long-term care services at some point in a person's life," he added. He also note premiums are not expensive.
McCann also notes that most long-term care policies will provide independent case management which helps relieve much of the burden on the family. This allows the family to be loving and supportive as opposed to running around making arrangements and figuring out which caregiver or facility has a good reputation.
Some articles suggest a person buys a policy when they are in their 70's so they don't have to pay premiums for so many years. McCann says this is a "criminal statement."
"A married 50 year-old in good health could pay about $750.00 a year for a good policy in Illinois," he says. If that person pays 35 years before they either die or go on claim, they would have paid in $26,250 in premiums during that time. They would have just under a million bucks to pay for care at that time. But a health married 75 year-old might pay around $3800 or more in premium. They pay for ten years and they paid in over $37,000 in premiums, much more than the 50 year-old," McCann says.
McCann also notes that health problems make it very hard for people over 70 to health qualify for a policy to start with. The federal government says that 40% of all people who require long-term care services are under the age of 65 ... so a long-term care situation can happen at any time in life.
"You can't wait until you have a chronic health condition, you need to purchase long-term care insurance when you are healthy otherwise it will either cost more or you may not be able to obtain it to start with," McCann said. He says check with a long-term care insurance specialist to advise you on your insurability and options.
Some articles tell people to buy group policies for long-term care. This advise can cost you money. McCann explains that most group policies end up costing more than non-group policies, especially if you are married and in good health. Group plans tend to have much limited benefits and cost more so you should always shop first. Remember to compare apples to apples. Many group plans do not include automatic inflation protection but only offers to buy more insurance in the future. This is not the desirable way to obtain inflation protection and will cost a consumer more over the time than a policy that inflates every year automatically.
"If you want to preserve assets, protect the lifestyle of a spouse or partner and relieve the burden on the family, then long-term care insurance should be considered as part of retirement planning," McCann says. He suggests working with a person who specializes in long-term care insurance and works with the top companies.
McCann's web site is http://www.McCannLTC.com and can be emailed through the site. His phone is 800-513-0020.