DO YOU NEED A PRESCRIPTION FOR LONGTERM CARE PROTECTION?
By: Calvin R. Rasey
Long-term care insurance has been around since the 80’s and most people are somewhat familiar with the product. The question then
becomes DO YOU NEED the PROTECTION? There is no simple answer to this question; different circumstances call for different
solutions. Long- term care insurance is designed to help pay the cost of providing assistance for those who can no longer perform normal
daily activities. There are four topics to consider when reviewing the need for Long Term Care:
1. Providing protection for our parents.
2. Age gap between you and your spouse.
3. Your healthy life style and the impact it may have.
4. Wealth preservation.
Many of us who have living parents may find it necessary to help with personal care. In our grandparent’s day, families weren’t dispersed
across the country and family members often took care of relatives in need. That’s not always the case today; sometimes circumstances
do not allow children to perform the care for the parents. In these situations, the only option may be a paid caregiver or assisted living
facilities. These facilities and caregivers can have a significant cost which could affect our retirement planning as well as college education
for our children. Medicare programs do pay limited benefits for rehabilitation and recovery at a skilled nursing facility immediately
following a hospital stay, but won’t pay for the slow decline in daily activities. Medicare also does not pay for custodial care to support
issues with dressing, bathing or pre-primary meals.
In many marriages there is an age gap between the spouses. The need for long-term care by an older spouse could cause significant
problems among the children and the healthy spouse. In this situation, long-term care cost could deplete assets that the younger spouse
may need for children’s education or normal living expense for the next 10, 20, 30 or even 40 years. Also, for those in second marriages
there is a common misconception about Medicaid and eligibility determined by evaluating a person’s assets and income. Many second
marriage couples believe that if a pre-nuptial agreement is in place, which separates the couple’s funds, they will not have to spend down
their combined assets before qualifying for welfare. The truth is, pre-nuptial agreements do not protect a couples assets from Medicaid’s
spend down requirements.
Did you ever stop to think that good health at retirement is going to cost you more money? Organizations such as Center for Retirement
Research at Boston College and the Association of American retired Persons have indicated that a couple in good health at age 65 in can
expect to pay on average $260,000 (with a 5%risk of exceeding $570,000) for out of pocket health care expenses. While a couple with at
least on H