Plans provide for those who can't perform ordinary living tasks The Green Bay Press-Gazett... Job: Long-term care insurance spe | Life Insurance
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Plans provide for those who can't perform ordinary living tasks The Green Bay Press-Gazett... Job: Long-term care insurance spe

The Green Bay Press-Gazette visits with newsmakers in the business world each week in its Monday Conversation feature. This week, Lynette Schiefer, Long-Term Care Financial Partners, discusses long-term care insurance.

A. Generally, long-term care is the care people need when they can't perform the tasks of ordinary living independently. These are activities such as bathing, dressing, toileting, continence, eating and moving around indoors or in the community. Or, the individuals may be able to do all of their activities of daily living but still need care and supervision due to a severe cognitive impairment (memory loss, dementia, etc.).

Those rich enough to self-insure can get along without long-term care insurance. And coverage may not be appropriate for those whose lifestyles would be seriously compromised by the monthly premiums. For everyone else — the vast majority of Americans — long-term care insurance is vital. That's why the government has introduced tax incentives to make the insurance more affordable and universally accepted, like auto insurance.

Skilled nursing facilities, also known as nursing homes: These institutions are usually comprised of two separate units, one that gives skilled nursing care (which may be covered by Medicare), and one providing non-skilled or custodial care (which may be covered by long-term care insurance). The goal of the "Medicare" unit is to provide services needed to rehabilitate patients so they can go home. However, often patients are unable to return home and are moved over to the non-skilled or custodial unit.

Assisted-care living facilities, also known as assisted-living facilities or residential care facilities: These institutions provide non-skilled care for people who need help with daily living but can also provide much of their own care. These institutions are an excellent alternative to nursing homes. The residents may live in apartments that they can personalize.

Adult day care centers: These community-based services were developed to help people stay at home rather than moving prematurely into nursing homes. The centers offer custodial care during weekdays and sometimes on weekends, too.

Q. What is the average stay for nursing homes and the average duration of home health care? Based on 2006 costs, what is the average annual cost for each?

A. The average stay in a nursing home is 2.4 years; and the average duration of home health care is 4.5 years. So the total outlay for an instance of long-term care ranges, on average, between $158,000 and $297,000 based on 2006 costs (higher taking inflation into account).

A. In Wisconsin, nursing home services currently average close to $70,000 per year. Costs are projected to rise dramatically in the years ahead.

Rely on family (spouse, children, etc). This is appropriate only when there is a support system in place with available time, money and accommodations.

Spend down all assets and then qualify for Medicaid. New federal legislation passed in 2005 makes this option more difficult and less attractive than it was in the past.

Transfer a predetermined amount of the long-term care risk to an insurance company. In other words, buy a long- term care insurance policy, which is the best option for most Americans.

A. The federal government offers tax incentives for individuals who purchase long-term care insurance. The Internal Revenue Service recently announced increased deductibility levels for long-term care insurance policies purchased in 2007. Increased tax deductibility limits are another indication of the government's commitment to encourage Americans to purchase protection against the possible risk of needing long-term care.

Business owners, especially those with C-Corporations, can deduct the full cost of long-term care insurance protection for themselves and designated individuals, including spouses. It's not just one of the few remaining tax-deductible expenses available to business owners but an outstanding way to pay for post-retirement asset protection.

A. First, the single biggest mistake you can make is waiting to learn about long-term care insurance. Waiting is risky because you might not qualify in the future. Getting the coverage while in good health means getting the lowest price because the cost of purchasing long-term care insurance goes up as you age. By protecting yourself now, you lock in a lower cost, you have a better selection of insurance companies while you are young and in good health. By acquiring long-term care insurance when you are younger, you gain additional years of coverage.

Thirty-nine percent of people needing long-term care are working age adults, ages 18-64. Personal family experience has taught me that long-term care issues can drastically affect even young people's lives.

Second, long-term care costs are projected to triple in 20 years. As costs escalate, the average total outlay for an instance of long-term care will exceed $1 million by the time millions of today's Americans are ready to make their claims.

Few can afford this expense without depleting entire estates or seeking public assistance. That's why long-term care insurance is so increasingly vital and why Washington and state governments are promoting it so aggressively.

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admin – Mon, 2007 – 04 – 23 11:00