Short-Sighted About Long-Term Care Insurance?

Copyright 2010 Kitsap Sun Kitsap Sun, Bremerton, Wash.

Distributed by McClatchy-Tribune Business News

May 9, 2010 Sunday

STATE AND REGIONAL NEWS

20100509-1BR-Short-Sighted-About-Long-Term-Care-Insurance-0509

972 words

Short-Sighted About Long-Term Care Insurance?

Rachel Pritchett, Kitsap Sun, Bremerton, Wash.

May 9--Chad Solvie, chief executive at Martha & Mary Health Care Center in Poulsbo, figures that 16 years ago when he entered the field, people 65 and older had a 10 percent chance of needing nursing-home care.

Today they have a 60 percent chance of spending time in a nursing home, he said. That's because many of us live longer, and also because hospitals are spinning off more patients to nursing homes.

Are consumers prepared to pay $6,000 to $8,000 a month for nursing-home care; maybe $5,000 a month for an assisted-living arrangement; or even $500 a month for in-home care?

There's Medicare and other help if you're poor enough; private pay if you're rich enough.

But experts say only 5 percent to 10 percent of Washington consumers are purchasing long-term care insurance, which can be the answer for most in the middle. It's an unexplored solution.

"I wish the public in general was better educated and planning better... for our future health needs," Solvie said.

Denial is part of the reason. Unless we have to, it's preferable for many of us to believe we'll never have a health crisis that could thrust us into a nursing home, encumber our families and chew up our assets.

"There's a lot of people who don't want to think about it ... and that delay -- that ignorance -- is having a real cost on the entire system, right now," Solvie said.

Long-term care insurance is only about 30 years old. It occupies a small corner of the industry.

It's evolved.

Older policies typically covered just nursing homes. Today, they also can cover costs for assisted living, adult day care, residential care like group homes, and hospice care, said Bill Cole of Bill Cole Retirement Planning of Silverdale, who sells long-term care insurance.

Solvie and Cole are among a small cadre of local elder-care professionals who are passionate about long-term care insurance, not so much for personal gain, but because they've witnessed the pain that happens to families when an unplanned-for health crisis strikes.

Cole remembers a couple in their 70s who were active and seemingly healthy when the man had a massive heart attack. For three years, he was bedridden, costing his wife $5,000 a month out of pocket.

"It's common. They don't think it's going to happen," Cole said.

It's after the crisis they start thinking about money.

"Often it's after the fact," agreed Marijean Holland, program manager for SHIBA, the Statewide Health Insurance Benefits Advisors, a consumer-help group.

MISCONCEPTIONS ABOUND

Some who've purchased the insurance are surprised it doesn't kick in when they think it should -- such as when they move into assisted living.

"That's the biggest complaint we get," said Gayle Helseth-Kenison, Kitsap County's long-term care ombudsman.

The standard in most policies is that if a client needs assistance with two of the following six functions, the insurance pays, Cole said. Those functions are bathing, dressing, eating, toileting, transferring (moving from bed to chair) and help dealing with incontinence.

Another misconception is that the policy they bought covers 100 percent of the cost, Holland said.

How much does long-term care insurance cost?

The average cost of premiums could fall around $2,000 a year, but vary widely. Cole gave two general examples:

A couple -- the woman 54 and the man 60 -- might choose a policy that covers $4,000 a month, with the couple figuring they can contribute $2,000 a month of their own assets to pay $6,000. With a typical 90-day elimination period -- sort of like a deductible where the policy doesn't kick in right away -- they'd pay $239 a month for the insurance.

That same policy for a couple age 75 might cost around $760 a month.

Long-term care insurance might not be a good fit for those with few assets or limited income, who might readily qualify for Medicaid or other assistance. But even rich people who have enough assets might want to protect those assets, Cole said.

The bottom line for those in the middle and upper-income brackets, Cole said: "Suck it up, chalk it up for another insurance you have to pay."

YOUNG PAY LESS

It pays to buy long-term insurance young, no matter off the radar screen the subject is.

"The younger and healthier you are, your rates are lower," said Holland, while cautioning that premium rates still can change.

Don't wait until after that stroke, heart attack or dire prognosis arrives. Insurers may go running.

"People still are in the misconception that they can buy long-term insurance anytime they want," Cole said.

Whether group policies purchased through work are better than individual policies sold by people like Cole depends.

Younger people up into their 40s might be better off with standardized group plans. Those further along in life might be better off with something more customized.

When choosing a provider, go with one that's been selling long-term care insurance for 20 or 30 years. Choose a company that will be around in the future, Cole advised.

The recent heath-care reform bill passed by Congress will phase in a national program of voluntary long-term care insurance for workers, called the Community Living Assistance Services and Support, or CLASS, act. It is the federal government's first long-term care insurance program, but will give only limited payment.

"It's a start," Solvie said.

Planning on how to pay for long-term care increases the chance there will be "positive memories" and not as many negative ones, Solvie said.

To see more of the Kitsap Sun or to subscribe to the newspaper, go to http://www.kitsapsun.com. Copyright (c) 2010, Kitsap Sun, Bremerton, Wash. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

May 9, 2010

Copyright © 2010 LexisNexis, a division of Reed Elsevier Inc. All Rights Reserved.
Terms and Conditions Privacy Policy