Linda Leitz: Paying for long term care

Nov. 22--Last week, we looked at the likelihood of needing long-term care and the cost of that care. Now let's explore the options for paying for that care.

Like many extraordinary unexpected expenses, a part of the insurance industry offers coverage for long-term care needs. Policies vary in price based on age, level of coverage, how long your policy would pay and your health. Long-term care insurance can use pre-existing health conditions when determining rates.

While this might appear like qualifying for life insurance, health issues are often different. For instance, a heart condition might more likely cause a sudden, premature death, making obtaining life insurance difficult. Cognitive impairment such as dementia or Alzheimer's, which sometimes requires ongoing supervision for several years, could be a problem in qualifying for long-term care insurance.

Because of the impact of various health conditions and the fact that different insurance companies have different criteria for issuing policies, an agent with experience is important. Bill and Susan Hall are local long-term care insurance experts who recommend an extensive discussion of health issues with your agent before filling out an application.

Their research shows that the average age for applying is 57 and the average premium is $200/month. The monthly expense for a care facility can be several thousand dollars a month, so annual premiums for long-term care insurance might equal the cost of a one-month stay in a care facility. Many policies have some inflation protection for benefits as well as providing for payment of home benefits.

The Halls find that people are buying policies that provide specific coverage rather than policies covering every potential contingency during a lifetime. Also, they said about 70 percent of those filing claims are women.

If you qualify for Medicaid, you may be eligible for benefits if you need long-term care. That can include home services or staying in a facility. The state will determine, based on your application, if your income and savings are low enough to qualify for benefits.

Rocky Mountain Options for Long-Term Care, which serves El Paso, Park and Teller counties, will then determine if you are eligible for functional needs. Carrie Schillinger, the agency's executive director, said that care might range from care at home a few times a week to a stay in a facility.

Care from a family member or other trusted individual, if that person has been properly trained, may be eligible for payment. Physical limitations, dementia, and mental illness are among the qualifying conditions.

No matter how you plan to pay for long-term care, you need a plan because it's better to have a plan that you don't need than to need a plan and not have one.

Linda Leitz is a certified financial planner and can be reached at [email protected].

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