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Long-Term Care decisions: a national crisis for the middle class

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About 70 percent of Americans will need Long-Term Care at some point in their lives, yet according to the Robert Wood Johnson Foundation only about 7 percent of Americans have Long-Term Care insurance. A CBS News story looked at how those in the middle—not rich, not poor—find themselves without resources for providing care for their loved ones because they aren’t poor enough to qualify for Medicaid and aren’t rich enough to pay for Long-Term Care on their own.

That leaves Long Term Care insurance as primarily a middle class option. Other options for the middle class include:

  • Personal income and savings, although Long-Term Care can rapidly deplete a family’s savings. A nursing home stay now averages about $100,000 a year and the average nursing home stay runs about 3 years.
  • Reverse mortgages
  • Trusts (such as the Safe Harbor Trust) used as an asset protection policy
  • Continuing Care Retirement Communities

For those people without family or at least without family they are willing to depend upon for care, Long-Term Care insurance increases the likelihood that you’ll be able to choose where you want to age even if that choice means staying at home.

For those in the middle class looking to purchase a Long-Term Care insurance policy the “trick” is to purchase a policy that makes financial sense while providing useful benefits. This article from PBS correspondent Lewis Mandell suggests some minimum qualifications to make sure a policy is useful.

In Washington state, consumers interested in purchasing Long-Term Care policies but looking for some options can look to the Long-Term Care Partnership Program.  The program helps consumers avoid the spend down or transfer of assets they would usually go through to qualify for Medicaid by providing a means to keep up to $200,000 in assets while still qualifying for Medicaid.

Purchasing a Long-Term Care policy isn’t a decision to go into lightly. Long-Term Care policy premiums have increased significantly in recent years and because the policies are purchased often decades before they are ever needed, it’s important that they provide inflation protection.  The newer policies allow consumers to access Long-Term Care benefits in their own home but often won’t pay family members to provide that care.

Paying for Long-Term Care is expensive but also confusing. The U.S. Department of Health and Human Services provides a great deal of information about Long-Term Care and how to pay for it on its website.

Planning for your Long-Term Care needs is about more than protecting your assets or worrying about the chance that you will or won’t need to access that level of care. It’s about retaining control over decisions about who will provide care for you should you need it, being able to choose where you live as you age and having some say in the type of care you receive (hospice, adult day services etc.).  Those are choices that will be more critical to your own satisfaction with your life. There is no one single right choice but making a decision to choose a course of action and then putting plans in place will go a long way to having the end of life care that you want.

Contact one of our Preferred Partners for more help with Long Term Care decisions.



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