As our population continues to age the need for long term care services continues to grow dramatically. According to the Department of Health website 70% of Americans over age 65 will need some kind of long term care in their lifetime. In addition, the largest provider of financing of care are tax dollars the Federal and state governments provide through Medicaid, not Medicare funding. (www.longtermcare.gov.).
The Federal government has imposed strict financial guidelines before tax dollars are to be used to pay for long term care. For an individual needing care, the total amount of assets that is allowed to be retained is only $2000!
Families are concerned that the high cost of nursing home care (currently $75,000 or more per year) will deplete their estates leaving nothing to give as a legacy to their loved ones. Romeo Raabe “The Long term Care Guy” asks a simple question “Would an extra bill of $50,000 to $90,000 a year be a problem in your retirement?” See www.Thelongtermcareguy.com
So what are families to do? The first solution would be to have a family meeting to put a Care Plan into place. Then the family needs to explore: 1) Purchase of a long term care policy that qualifies as a partnership plan in Wisconsin; 2) Consider self funding costs with a tax deferred HIPAA annuity with a long term care rider; 3) Explore purchasing life insurance with a long term care rider; 4) Determine if a Continuous Care Facility or life care residence is a safer and financially viable alternative to home care ( www.carf.org); 5) Have our Team of experts prepare an Estate plan for you that will preserve a significant amount of your assets from the rising cost of long term care. 6) Establish a reverse mortgage, either as a line of credit or as an annuity payment as a way to finance home care long term care costs.
A final alternative that will be available beginning in 2011 is a new Federal program to be established through the Department of Health as a voluntary payroll deduction Long Term Care Program through employers. If offered by a company, each employee will be enrolled in the plan unless they elect out of participation. The program is designed to pay for a small amount of long term care costs (between $50-$75 a day) as a benefit, with indexing for inflation.
Benefits are available after 5 years of premium payments. Since there is no medical underwriting individuals with health conditions will be accepted into the program automatically.