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.