As Elder Law attorneys, we help financially-concerned clients qualify for needs-based, long-term care assistance under Medicaid (aka, ALTCS). Think of this as financial support for those that otherwise would be unable to pay for such end-of-life care (which, at a minimum, involves assisted living or a possible stay at a residential care home and, more intensively, involves memory care).
When first broaching this topic, we always begin the discussion by addressing what, in our view, is the “first line of defense” to alleviate such concerns – long-term care insurance. Many clients initially believe they are either too old to be insurable or (even if insurable) wouldn’t be able to afford the insurance premiums. Often times, this belief is quickly reversed by successfully finding affordable, adequate policy options from one of our trusted insurance advisors!
REASONS TO ACT SOONER, NOT LATER: The older you get, the harder it is to qualify for long-term care insurance. If you are interested in buying this insurance, it is better to act sooner rather than later. Many people put off purchasing long-term care insurance until they need it, but by then, it may be too late. Not only do premiums increase as you age but you also may not qualify for insurance at all due to your health. The older you are, the more likely you are to have a pre-existing health condition that will disqualify you from getting long-term care insurance.
According to a recent study by the American Association for Long-Term Care Insurance, 44 percent of applicants who were age 70 or older had their applications denied due to health reasons. In contrast to older applicants, only 22 percent of applicants who are between 50 and 59 years old and 30 percent of applicants between 60 and 69 years old had their applications declined. Generally, the best (and cheapest) time to buy long-term care insurance is when you are in your 50s.
COSTS: While long-term care insurance costs are up in general, some policies are going down in recent years. A married couple who are both 60 years old would pay an average of $3,490 a year combined for a total of $333,000 of long-term care insurance coverage when they reach age 85. This is down from 2017, when it was reported that a couple could expect to pay $3,790 for the same level of coverage. Rates for single men and women, however, have slightly increased overall. A single 55-year-old man can expect to pay an average of $1,870 a year for $164,000 worth of coverage, up from $1,665 in 2017. The same policy for a single woman averages $2,965 a year, up from $2,600 in 2017. Notice, unmarried women are the most expensive to insure (presumably because women tend to live longer and unmarried persons are unable to rely on a spouse for this financial help).
So, how do you find affordable coverage? First and foremost, seek policies which have fixed (or relatively fixed) premium costs which aren’t likely to increase prohibitively over time. Also, it remains important to shop around, whether through multiple insurance providers or through a non-biased insurance salesperson (such as the financial professionals with which we work!) who will compare a number of different insurers. After all, it’s relatively common for virtually-identical policies to vary significantly in cost from one insurer to the next.
NEED FOR A TRUSTED INSURANCE ADVISOR: While only about 19% of current U.S. residents will need to reside under long-term care for a period of 3+ years, that number sharply increases when factoring in nursing home stays of a shorter duration (which will still have a substantial impact on your estate). The process of completing a long-term care plan may sound daunting, but we’re here to help you by making it a streamlined experience. Simply get in touch with us today and let us put you in a more secure position for the future.