Aging Options

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Long term care insurance options

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If you don’t buy long term care insurance you have two choices:  self-insure or spend down most if not all of your assets so that you can qualify for Medicaid.  At least that’s what the choices have been but there are at least three other options. 

Option 1:

The Washington state Long-term care partnership (LTCP) program is a collaboration between the Washington State Health Care Authority (HCA), the Washington State Office of Insurance Commissioner (OIC) and the Department of Social and Health Services (DSHS).  The program which first came into effect on Dec. 1, 2011 combines private LTC insurance and special access to Medicaid by allowing individuals to protect some or all of their assets and still qualify for Medicaid if their long term care needs extend beyond their private insurance policy’s coverage.  The partnership links long term care policies called Partnership-qualified policies with Medicaid.

This sort of policy allows an individual to apply for Medicaid under modified eligibility rules that include an asset disregard.  The disregard allows the individual to keep assets, usually savings that would normally have to be spent down to qualify for Medicaid.  The amount that Medicaid will disregard is equal to the amount of the benefits under your long-term care Partnership-qualified policy and the state will not recover those funds after your death.

For information on Washington state’s Long Term Care Partnership Program, go to the Office of Insurance Commissioner website and if you are into reading WACs you can find the pertinent ones here.

Option 2:

Maybe long term care insurance is too expensive.  How about short term care insurance?  An article on Forbes website, suggests that for some folks who can’t afford full coverage or who may have an existing condition, one alternative might be to purchase a policy that would cover a short duration with a low daily benefit.  There would only be some very limited practical reasons to go this route which is why when you are contemplating purchasing something as complicated as long term care insurance or you are considering not buying it at all, you should get an expert opinion.  An elder law attorney or a financial planner can help clarify whether any sort of policy makes sense for you.

Option 3:

An article in The Wall Street Journal suggests an end run around the whole long term care insurance policy position and that is the author suggests rather than buy a long term care policy, buy into a Continuing Care Retirement Community (CCRC).  Be forewarned: CCRCs don’t come cheap and there are nearly as many reasons to forego that option as there are to go with it.  If you do consider a CCRC, get some help.  Their contracts can be intimidating, you’ll need to do the same sort of due diligence you would do if you were considering buying a business and their prices aren’t in stone so you may be able to bargain for a better price.  If those are not on your list of talents, you should consider hiring someone who does have that kind of skill.

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