Long term care insurance premiums are now tax deductible for individuals in a growing number of states. A new online guide reports on state-level tax deductions and tax credits for long term care insurance.

When my mother turned 65, all she wanted was a shiny, new long-term care insurance policy. As an obliging daughter, I found the perfect fit!

Mom was on to something. According to the U.S. Department of Health and Human Services, about 70 percent of people over age 65 will require some type of long-term care (LTC) during their lifetime, and more than 40 percent will need care in a nursing home. In 2008, 21 million people had a condition that required personal care assistance, and that number is expected to rise as the population ages.

If those odds don’t scare you, maybe the dollars will. In 2010, the approximate cost of nursing home care was over $83,000 per year for a private room, $75,000 for a semiprivate room and $40,000 per year for care in an assisted living facility (for a one-bedroom unit), while home health aides charged $21 per hour. Prices vary depending on the state, but you get the idea – this is big money.

And let’s be clear: This kind of care is largely NOT covered by Medicare, which only addresses short-term skilled services or rehabilitative care. The government will step in (via Medicaid) only if you deplete most of your assets — not something I advocate. Unfortunately, the stories of people blowing through their hard-earned retirement accounts are not fiction — one of the swiftest ways to deplete an asset base is to get sick at the wrong time. That’s probably why Medicaid currently accounts for 40 percent of all spending on long-term care.

Ideally, everyone would be able to find affordable LTC coverage, but it’s just not an option for many. The Affordable Care Act of 2010 originally had a component for LTC, which would have provided basic coverage (about $27,000 per year) for an annual premium of only $1,500. Sadly, the plan was suspended because a bean counter realized that it might cost a lot more than originally anticipated.

That leaves most people who own a house and have saved a chunk of money (let’s say a total net worthof over $300,000) with a rotten dilemma: either pay for private long-term care insurance, which is mighty expensive, or roll the dice and hope that you don’t need care.

If you are single, maybe you don’t mind assuming the risk. You could spend down your money, leave the kids zilch and qualify for Medicaid under the worst-case scenario. If you have more than $1.5 million, you could choose to “self-insure,” or pay for care yourself.

If you are married, with assets between $300,000 and $1 million, you might be risking your healthy spouse’s quality of life. For example: Joan and Mike are 70 years old with a house and retirement accounts totaling $800,000. Mike has a stroke, which he survives, but he needs more care than Joan can provide. Mike enters a nursing home, which costs $80,000 per year, lives three years and then dies. Joan is left with a greatly reduced nest egg and now must sell her home and make some tough decisions.

There is a middle road. On average, women need care for 3.7 years and men 2.2 years. One way to reduce the cost of an LTC policy is to choose a three- or five-year benefit period. Yes, there are some who will need care beyond five years (about 20 percent), but the cost of an unlimited benefit period could outweigh the risk.

Another way to reduce the cost of LTC insurance is to insure a portion of your daily need, rather than the whole thing. As you shop for LTC providers, stick with the highly rated companies with a proven record of not hiking premiums.

The bottom line is that there’s no sure-fire way to eradicate long-term care risk, but at the very least, you can reduce it.
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For more information about long term care insurance in La Jolla CA, contact Capstone LTC Insurance Services. We specialize in helping families with the security they need for the future. Call 858-350-3161.

Half of individuals who are 45 years or older have not started strategizing about retirement and other needs as they age. The actions among this age group show that the volatility of the economy, stock market, and prospects of Social Security dwindling is causing them to put off planning rather than confronting the challenges head on.

Financial advisers and elder care attorneys say these events should jolt future retirees to plan for their future. Merrill Lynch notes that couples close to retirement should dedicate half as much time on retirement planning as they do about future vacation plans. Talking honestly and strategizing about health care needs and financial investments pays off when done early and with the right experts to guide retirement plans.

Retirees must consider whether their assets can last for a lifetime. Investments should start to be mixed so that some are conservative while others still have the opportunity for growth as one ages. Even in this volatile market, it is not wise to hold all cash or low-earning certificates of deposit. Being averse to growth investments can oftentimes cause assets to be burned through earlier in retirement. With little prospects for getting a full time job after the age of 70, it is far wiser to have an expert review asset allocations so one’s nest egg can last longer.

Proactive retirement planning also includes reviewing health care needs and the prospect of long-term care. The U.S. Department of Health and Human Services estimates that 70 percent of people will need this type of care, which can be quite expensive when nursing home or in-home care costs are calculated. Long-term care insurance, inflation concerns, and government benefits should all be discussed with an experienced elder care lawyer to ensure a couple has the right plans in place.

Elder care and estate planning lawyers can also help strategize about Social Security income and retirement accounts, and what is the best time to start drawing from each resource as a retiree ages. Planning ahead is advised to stretch out assets and enjoy a more comfortable retirement.

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What You Need to Know About Long-term Care Insurance
By Sandra J. Sunken

Long-term care insurance can help protect your assets from being decimated by an extended illness. Deciding whether you need a policy is an important part of your financial planning.

To begin, consider your overall financial picture. If you have enough assets to pay the premiums, but not enough to afford several years of uninsured care, a policy may provide peace of mind.

In general, long-term care policies fall into two categories: qualified and nonqualified. Premiums paid for a qualified policy are deductible as medical expenses. Long-term care policies are available with a variety of options. The policy that best suits your needs will depend on four key variables:

• Benefit period. This is the length of time you will receive benefits under the policy. Generally, the shorter the benefit period, the lower the premium.
•  Daily benefit. This is the maximum benefit paid per day. Check the average rate for care in your area to help you decide the daily benefit you need.
• Elimination period. This is the length of time that you will have to pay your own expenses before coverage takes over. Basically equivalent to an insurance deductible, the longer the elimination period, the lower your premiums.
• Benefit “triggers.” These are the requirements you must meet in order for benefits to begin. As a practical matter, the more “triggers” a policy recognizes, the easier it is to collect benefits.

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For more information about long term care insurance in Oceanside CA, contact Capstone LTC Insurance Services. We specialize in helping families with the security they need for the future. Call 858-350-3161

Perks That One Can Get From Long Term Care Insurance in San Diego CA
By Sean Martens

When we were younger, we often hear the cliché, Health is Wealth from our parents and other older family members to remind us to take good care of ourselves. But in reality, we still cannot predict or prevent having certain illnesses and diseases especially if our immune system is weaker due to old age. This is when the importance of long term care insurance policies suddenly pops into our minds. With the hectic and stressful jobs that we take on everyday, are we prepared to face the consequences of these situations in the coming years?

LTC insurance policies provide numerous services and facilities that aim to give aid and help those insured individuals go on living without feeling much burden and difficulties in dealing with the diseases that they acquired or simply because of their old age. These services and facilities were specially given to the insured persons to cater to their individual medical requirements.

The policy owners would be entitled to stay or be confined in an adult day care or nursing home facilities while being treated and supervised by licensed and professional medical workers such as doctors, nurses, and even caregivers, who are all skilled enough to attend to their needs.

The main tasks of these medical professionals is to make sure that the welfare of the policyholders are given utmost importance, and they also serve as the coordinators between the insured person and his family members. They give updates and report any concern or progress regarding the health and stay of their insurance owner in their nursing home.

Those who own long term care insurance policies may also use some hospital and other medical equipments and facilities that their health condition requires. They will be allowed to use these facilities as long as they are guided accordingly by the medical workers who were assigned to supervise them.

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For more information about long term care insurance in San Diego CA, contact Capstone LTC Insurance Services. We specialize in helping families with the security they need for the future. Call 858-350-3161.

Boomers’ ‘Delusion’ About Health In Retirement
by Julie Rovner

Most baby boomers say they’re planning on an active and healthy retirement, according to a new poll conducted by NPR, the Robert Wood Johnson Foundation and the Harvard School of Public Health. And, in a switch from earlier years, more than two-thirds recognize the threat of long-term care expenses to their financial futures.

But some experts worry that when it comes to their health, boomers are still woefully unprepared — or worse, in denial.

“The mismatch between how people think the next 10 to 15 years is going to go and what current retirees experience is something that’s very consistent,” says Jeff Goldsmith, a health care futurist and author of The Long Baby Boom: An Optimistic Vision for a Graying Generation, a book about aging baby boomers and their long term care. “There is no question that one distinguishing feature of our generation is this extraordinary, almost genetic optimism. And the poll results look to me like a lot of that optimism was drawn from a deep well of self-delusion.”

Health And Exercise

For example, notes Goldsmith, only 13 percent of people over age 50 but not yet retired said they expect their health to be worse in retirement than it is currently. Yet 39 percent of retirees said their health is worse than it was in the five years before they retired.

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If you are looking into options for covering the cost of long term care, please contact Capstone LTC Insurance Services. We have helped many families with Long Term Care Insurance in San Diego and the surrounding communities. Call 858-350-3161 for more information.