Tim Vendt
Financial Security
"Securing Your Future" 

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Long-Term Care

Long-Term Care is the type of care a person receives when the ravages of disease, frailty, or cognitive impairments make it impossible for that person to adequately care for themselves.  While a small percentage of Long-Term Care is skilled nursing care, most long-term care is non-skilled personal care assistance.  Long-term care is the type of care administered in nursing homes.  However a person can get Long-Term Care in several other settings including; Assisted Living facilities, Adult Day Care centers, Alzheimer units, and even within a person’s own home.  Paying for Long-Term Care can completely devastate an individual’s nest egg to the point of impoverishment.  I think the best source of information for you about the cost of Long-Term Care is to pick up the phone and call a nursing home or home health care agency of your choice. 

Long-Term Care Insurance is thought by many to help create a solid foundation in retirement planning for “Wealth Preservation” and “Wealth Transfer” planning.  As medical science finds more ways to keep us alive longer the need for Long-Term Care is becoming more of a reality for an ever-increasing segment of the population.  It appears that our government realizes this and is trying to encourage people to prepare for this part of their life. 

    1) Medicare seems to be doing
        less and less for Long-Term
        Care patients

    2) The government created some
        tax incentives for people who
        purchase “Tax Qualified” Long-
        Term care insurance

    3) The Deficit Reduction Act of
        2005 makes it more difficult for
        some individuals to qualify for
        the welfare program… Medicaid

    4) The Deficit Reduction Act of
        2005 makes it possible for
        additional states to enact Long-
        Term Care Partnership
        Programs

In Partnership states private insurance companies can sell “Partnership” Long-Term Care Insurance policies.  The benefit of a “Partnership” policy is that for every dollar paid out in benefits, a dollar of personal assets doesn’t have to be spent down for the individual to go on to Medicaid.  For example, if the policy paid out $200,000 in benefits, up to $200,000 in personal assets could be set aside and not included in the calculation to determine if that person is eligible for Medicaid.  Partnership policies have to meet specific criteria as determined by each state.  Missouri and Arkansas are two of the states that have enacted Long-Term Care Partnership Programs.  Following are some of the Partnership policy requirements for Missouri and Arkansas:

    1) The policy must be tax-qualified

    2) The policy must contain certain 
        inflation protection provisions
        at the time it is sold:

        Less than age 61
        In Missouri companies must
        offer a 5% compound annual
        increase.   If rejected by the
        consumer, a minimum of a 3%
        compound annual increase or
        increases based the consumer
        price index must apply.

        In Arkansas policies must have
        a minimum of a 3% compound
        annual increase.

        Age 61 through age 75
        In Missouri Some level of
        inflation protection must apply.

        In Arkansas policies must have
        a minimum of a 3% annual
        simple interest increase or the
        increase can be based on the
        consumer price index.

        Over age 75 
        No inflation protection required
        for Partnership plans

For more information about Missouri’s or Arkansas's Long-Term Care Partnership Programs I think the best sources are the “Frequently Asked Questions” sections of each states special Long-Term Care Partnership Program websites.

MO LTC Partnership FAQs

AR LTC Partnership FAQs

As you consider your Long-Term Care Insurance options it is important to understand that the same Long-Term Care Insurance plan is not for everyone.  There are a lot of options and it is important to find a plan that is right for you and your family.  For some people a small amount of coverage gives them peace of mind and an acceptable level of financial protection.  These individuals might not even need a Long-Term Care Insurance policy, for them a Short-Term Care policy might make more sense.  A Short-Term Care policy also makes a lot of sense to be used in conjunction with a “Tax Qualified” Long-Term Care policy.

I hope you will find this information useful, but remember, it is designed to be basic… not all-inclusive.  The best approach is for us to discuss your particular situation.  If you live in the state of Missouri or Arkansas and would like a Long-Term Care Insurance or Short-Term Care Insurance quote or would just like to understand your options, just fill out the "I Want Information About Long-Term Care Insurance" form, call, or email me.
 

 

 

 

 

 

 

 

 

 

 

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      Additional Information

A good source of information is a publication of the National Association of Insurance Commissioners entitled “A Shopper’s Guide to Long-Term Care Insurance”.  To get your own free copy you can contact me, call the National Association of Insurance Commissioners at 1-816-842-3600.  Or, if in Missouri, call the Missouri Department of Insurance, Financial Institutions & Professional Registration at 1-800-726-7390.  In Arkansas call the Senior Health Insurance Information Program at (800) 224-6330.

Another good source of information is the U.S. Department of Health and Human Services National Clearinghouse for Long-Term Care Information website.

U.S. Department of Health and Human Services National Clearinghouse for Long-Term Care Information