According to some estimates, 69% of Americans who live to be at least 65 years of age will at some point in their life require long-term care. Though people in the United States now live longer than ever before, that added longevity comes at a price in terms of medical ailments, disease, and age-related injuries. As a result, the chance that you’ll one day need nursing home care has risen dramatically in recent decades. The problem is that nursing home costs have also risen to astronomical heights, and residents in those facilities can now face daily costs that exceed $200 a day.
Few seniors have the resources to manage those expenses, and family members are not always in a position to help cover costs. That often forces the elderly to rely on the government program Medicaid, which requires that applicants be all but impoverished before they can qualify for benefits. While Medicaid planning can help seniors to protect some assets while still being able to qualify, there is one other option that is often overlooked: nursing home insurance. In Georgia, a partnership between the state’s Department of Community Health and private insurers can even help seniors to enjoy some level of asset protection and exemption from Medicaid’s asset limit and estate recovery attempts.
What is Nursing Home Insurance?
Long-term care insurance is a type of insurance designed to help cover the costs of nursing home care that policyholders might need at some point in the future. Like other types of insurance, LTC insurance needs to be purchased in advance of actual need. Just as you purchase auto insurance long before an accident, you need to buy long-term care insurance well before you actually need nursing home care. These policies can typically provide benefit payments for nursing home stays with intermediate or skilled nursing care, and assisted living. Home care options are offered on an optional basis.
Why Doesn’t Everyone Have This Coverage?
Some might wonder why long-term care insurance isn’t more commonly utilized by Georgians and others across the nation. The answer is simple: awareness and cost. The fact is that many people simply aren’t aware that this type of insurance exists. While other types of insurance are either mandated by law or so commonplace that everyone knows about them, long-term care coverage is a bit of a mystery to a large segment of the population. And even those who do know about it are often put off by the cost associated with maintaining a policy.
An annual policy can cost more than $2,000 a year, which can be a real burden for many of the Georgians who need it the most. Unfortunately, long-term care insurance premiums tend to rise as health care costs increase each year. As a result, those policy costs are unlikely to go down any time soon, as most estimates predict that health care is only going to become more expensive in the years ahead.
That fact can be interpreted one of two ways, of course. Some might argue that anticipated increases in health care costs and subsequent increases in insurance costs are a deterrent to purchasing long-term care policies. On the other hand, since a dramatic increase in nursing home costs is all but assured in the future, it also makes sense to seriously consider whether this type of policy can actually work to protect yourself against those future high costs. After all, if you don’t think you’ll be able to afford to pay for future nursing home costs at today’s rates, there’s little reason to believe that you will have an easier time managing them as those costs rise to even loftier heights.
How Does the Long-Term Care Partnership Work?
The state of Georgia has developed a partnership with private insurers to create the Long-Term Care Partnership Program. The program offers residents of the state an opportunity to enjoy asset protection benefits by purchasing their own private nursing home insurance. Essentially, when the insurer pays out policy benefits to cover the expenses of a policyholder’s long-term care, Medicaid disregards – on a dollar-for-dollar basis – an equivalent amount of the policyholder’s assets when determining eligibility for Medicaid benefits. In addition, those assets are then exempt from any attempt by Medicaid to recover benefit costs from the policyholder’s estate.
The policies that are included within the partnership program are tax qualified in accordance with federal mandates, and are also required to provide policyholders with some level of protection against premium inflation. That requirement can help residents to avoid much of the burden created by rising costs, and provides a powerful incentive for Georgians to consider the purchase of this type of insurance early in life while they are healthy and eligible for the lowest premium rates.
Making Long-Term Care Insurance Work for You
Obviously, long-term care insurance is not something that should be delved into without due consideration. Like every other financial decision that you make, the choice of how to deal with anticipated nursing home care is one that can have dramatic impact on your financial and estate planning needs. This type of decision should be made in consultation with your estate planning attorney, to ensure that the policy you choose complements other aspects of your estate plan. With the right strategy in place, however, you can effectively prepare for any future long-term care needs without spending down assets or giving away everything that you own.
At the Fouts Law Group, LLC, our elder law experts can help you to make the right decisions about your future long-term care needs. We’ll evaluate your current circumstances, work with you to explore all of your available options, and then help you decide which nursing home insurance or Medicaid planning option will best suit your needs. If you want to protect your assets, guard against rising costs, and ensure that your best interests are safeguarded when you need long-term care, then contact us online or give us a call at (678) 242-8344 now.
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