Long term care included in health care reform

Until I saw this article reprinted in today’s paper, I was unaware that long term care had been inserted into both the House and Senate versions of the health care reform bill.

The program would create a voluntary long-term care insurance program to be run by the government.Voluntary, yes. But workers at participating companies would be automatically enrolled — critics say “tricked into” enrolling — unless they opted out. People would see a deduction for the program from their paychecks — estimates range from $160 to $240 a month — unless they signed a form or clicked a box saying they wanted to keep the money.

Long term care insurance is one of the many things that I review with my clients. I’ve seen the effects of not having it: literally, I’ve had to do the math for to figure out how long it will be before a client’s money runs out due to assisted living and nursing home costs. It seems that folks plan to retire – and try to save accordingly – and to die – and purchase life insurance – but rarely consider the devastating effects on their financial health that an illness or disability can create.

A whole cottage industry has sprung up around “spending down” for Medicaid eligibility. (Here’s one person’s story on that.) Designed for the poor, Medicaid has strict requirements on income and assets.  In order to qualify, excess assets and income must be disposed of.

Usually, planning involves the transfer of the funds to the children of the couple or individual and once given belong to the recipient(s) to do with as they wish. Routinely, the children will hold the funds, in the event the parent may have a need Medicaid will not supply, to be used for the parent. This decision is entirely up to the children.

I happen to believe that long term care insurance is a better solution. (Yes, I have the insurance. No, I don’t sell it.) That both versions of the bill include a provision for this is a good thing.

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6 thoughts on “Long term care included in health care reform

  1. I don’t know how great this plan will be. My dad and I were discussing this over the holiday. I don’t think many will end up participating because there is no marketing for this program. Also, the Secretary of HHS has to balance the plan. So, if receipts are poor, then benefits get slashed.

    Private insurance is still going to offer better benefits in this regard. But I guess help is help.

    It is sort of surprising that more people don’t consider this insurance. In terms of the benefits you receive, it is really a deal.

    1. The $50 a day benefit is the most troublesome part for me, especially with the estimated premiums (which seem awfully high).

      If this drives more people to purchase, even from the private sector, it will accomplish a significant goal.

  2. >>>Any actively working American could participate, but would have to pay premiums for at least five years before being eligible to make a claim. Premiums would be stable over a person’s life, unless the government had to raise them to keep the program solvent.

    Include me out.

    No Sale.

  3. “I agree with you Vivian on having long term care. I enrolled a few years ago after viewing my aunt’s demise as she suffered Alzheimer’s Disease.”
    “Love many,trust few, be able to paddle your own canoe!”

  4. Long term care insurance is an excellent idea. I’ve worked with client’s with and without long term care insurance and I notice a difference in their ability to spend money on other things (walkers, wheelchairs, etc.). I’ve also seen many families also do the math re: how long the money will last until they will have to apply to Medicaid (or qualify for a Medicaid funded bed/room).

    – Kevin

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