Saturday, October 10, 2009

I just read a posting from columnist Terry Savage and felt that anyone visiting this blog could also benefit from her comments and her book.

Her weekly syndicated column is "The Savage Truth on Money" and she is a book author too.

On Saturday, October 10, 2009 she was answering a typical question.
Q: Do I really need to think about long-term care insurance? Her answer was a bit long but to give this important subject it's proper perspective she gave her opinion and backed it up with facts. Here it is:
A: Headline: Last week, the Centers for Medicare and Medicaid Services reduced Medicare funding for nursing homes by an estimated $16 billion over the next 10 years. Twenty-four states already have reduced Medicaid funding this year. And $313 billion of additional cuts have been proposed by the administration to fund health care reform.
Message: Don't count on the government to take care of you in your old age! They're already running out of money -- long before the boomers begin to retire. Remember when boomers hit school age and were squashed into modular classrooms? As boomers age, you'll see crowded, modular nursing home rooms -- perhaps a final use for those old FEMA trailers! This is serious, a real warning.
Answer: Consider long-term care insurance now!
The cost of long-term custodial care is the most devastating thing that could happen to your retirement plans -- even worse than a bear market. Yet it is the thing we least want to think about. And boomers haven't been forced to confront this reality, because our parents are living longer, with new hips, knees and heart valves. But eventually, we will all wear out!
This kind of "custodial care" is not covered by Medicare or supplements, although they do cover a limited amount of "skilled" nursing home care after a period of hospitalization. But custodial care means help doing basic activities, such as bathing, dressing, feeding, toileting. This year, it costs nearly $80,000 on average to provide full-time custodial care, at home or in a nursing facility.
Long-term care insurance is not necessarily about nursing homes. In fact, if you have either enough money or insurance against the cost of care, you could get care at home or in your choice of an assisted living facility.
But if you cannot pay for your care, the alternative that Medicaid offers is becoming less and less appealing. Most government-funded care is provided in nursing facilities, not in your home. Those are the places where funding is being cut.
Claude Thau is a long-term care insurance expert who helped create policies offered by some major insurance companies and now helps insurance brokers understand the products. Thau says: "Nursing homes are extremely anxious because of recent reductions in Medicare and Medicaid payments to them, along with the administration's stated intent to squeeze them further to finance health care reform. We can expect nursing homes to lay off staff, cut services, convert to nongovernment funding sources and/or close their doors."
This is reality, not just a "pitch" for long-term care insurance sales. Notes Thau: "LTC insurance is increasingly valuable to be able to cover the cost of quality home care and quality facility care from providers that do not rely upon government subsidies."
In other words, if you want choice of care, you must be able to pay for it!
While full coverage for long-term care is expensive, there are newer policies that will at least contribute to the cost of your care, perhaps for only two or three years of coverage. There are discounts for spouses, or policies that cover both spouses, designed to lower the premiums. It's worth investigating.
There are so many details to this kind of insurance that I devoted an entire section of my latest book -- "The NEW Savage Number" -- to the subject. You can find it now in paperback at bookstores, the library or on my Website,
This is not about selling books -- or insurance! It is about protecting my readers against the devastating costs of long-term care. The message is aimed not only at older boomers, but the younger ones who won't want to place Mom or Dad in a Medicaid-funded nursing home.
And this is especially a woman's issue -- because women live longer, likely alone, and need not only the money, but the "concierge" services to find and schedule caregivers, included with most of these long-term care insurance policies.
I've put my money where my mouth is -- purchasing policies for my parents and myself. I hope it's a huge waste of money -- and that no one I love needs that kind of care. But hope is no substitute for planning. And that's The Savage Truth.
Thank you Terry for the non-political answer to a tough question.

Wednesday, September 23, 2009

Realizing the value of planning

Thank you for the birthday wish. I see the withdrawl monthly from my bank account so I am reminded of my policy. My daughter in law told me this weekend that her father is very ill and needs 24hr care. He is in some kind of care facility but wants to come home. The cost of nursing care at home will be more than 200 a day. I was surprised they did not have any kind of long term care ins. I am now so glad and thanks to you that I have my policy.
A.S. in Texas

Note: This is always about peace of mind; for you and your family.

Saturday, June 27, 2009

Texas Partnership Plan will benefit you.

My generation has taken quite of bit of abuse in the media. We are accused of being the "immediate gratification generation". Supposedly, long term financial planning may be waiting for the BestBuy circular on Sunday. I know that this has fueled several popular talk shows like "Dave Ramsey, etc." Those folks are not the ones that I am speaking with. I typically speak with the planners that have assets to protect and don't want to be dependent on family for their long term health needs.
The state legislature passed the Partnership Plan for Long Term Care with the intention of giving citizens an incentive to act responsibly. By working with a partnership certified agent, you can legally protect your assets for your family and provide a safety net for the catastrophic cost of care.
How it works: Say a consumer purchased a long-term care policy with $300,000 in benefits and has $300,000 in assets. He or she enters long term care and uses up the benefits in the policy. At that point, his $300,000 in assets will not be considered when determining if he qualifies for Medicaid. Without the partnership plan, all of the assets must be spent down to the minimum level before any state money could be used. The look back on assets given away is currently 5yrs. "Under a State Long Term Care Partnership Program, an amount equal to the benefits received under of the long-term care insurance policy is disregarded in determining the assets of an individual for purposes of Medicaid eligibility and estate recovery".
Do yourself a favor and speak with an independent agent that is "Partnership Certified" and understand how this will benefit your family.