Can't Afford Long-term Care Insurance? It May Be More Affordable Than You Think

For many people, the greatest deterrent from purchasing long-term care insurance is the notion that it is too expensive.

However, with insurers delivering simpler long-term care insurance policies, you may find long-term care insurance more affordable than you think. A long-term care insurance plan can be tailored to fit almost any budget. And, as the cost of long-term care services-including nursing home care, home health care and custodial services-rises, it doesn't take long before it exceeds the cost of long-term care insurance.

"With the national average annual cost of nursing home care over $65,000 and rising, the cost of just two or three years in a nursing home can wipe out the average American's retirement savings," said Mutual of Omaha senior vice president James Blackledge.

Alternatively, said Blackledge, the break-even point for long-term care insurance can be realized in a short amount of time.

Consider this example: A 60-year-old could purchase a basic policy with a five-year benefit period and a $100-per-day benefit for about $1,400 annually. If he or she were to need long-term care services in 10 years, the premium paid for the long-term care insurance ($14,000) would be paid back in benefits in less than six months ($100 per day x 140 days = $14,000).

It's common for companies to offer a variety of preferred rates and discounts for good health, married couples and members of certain associations. Some long-term care insurance policies offer tax advantages that allow you to deduct eligible premium amounts as medical expenses. In addition, the benefits paid by long-term care insurance policies are tax-free. Like life insurance, the earlier a person purchases long-term care insurance, the lower the rate.

Asset Protection

Unless skilled nursing care is also required, Medicare does not cover assistance with activities of daily living-mobility, dressing, housekeeping and meal preparation-often associated with most long-term care services. With Medicaid, a person must first use nearly all of his or her financial assets to become eligible.

"Long-term care insurance protects your assets so you don't have to watch your life savings whittle away. It provides coverage for all types of services whether at home, in an assisted-living facility or a nursing home," Blackledge said. "With longer life expectancies, the likelihood of needing some sort of long-term care services increases."

Because you never know when you're going to need long-term care, experts advise selecting a company that is experienced in long-term care insurance and financially sound to ensure it will be around to provide you with coverage far into the future.



By: Wendy Mitchell

For more information on long-term care insurance, visit mutualofomaha.com. Some long-term care insurance policies offer tax advantages that allow you to deduct eligible premium amounts as medical expenses.

HHS Launches New Website Promoting Long Term Care Planning

Essential Planning Tool to Help Americans Own Their Own Future

HHS’ Assistant Secretary for Aging Josefina G. Carbonell announced a new Web site that will make it easier for consumers to get the information they need to plan for long-term care. The National Clearinghouse for Long-Term Care Information Web site provides comprehensive information about long-term care planning, services and financing options, along with tools to help people begin the planning process.

The clearinghouse Web site is designed to increase public awareness about the risks and costs of long-term care and the potential need for services, and to provide objective information to help people plan for the future. The clearinghouse Web site was designed by HHS’ Administration on Aging (AoA), Centers for Medicare & Medicaid Services (CMS) and the Assistant Secretary for Planning and Evaluation (ASPE).

"The National Clearinghouse for Long-Term Care Information Web site is an important step toward giving consumers the tools they need to take personal responsibility for planning for their future long-term care needs," HHS Secretary Mike Leavitt said.

The Deficit Reduction Act of 2005 mandates that the Clearinghouse contain the following: objective information to help consumers decide whether to purchase long-term care insurance or to pursue other private market alternatives that pay for long-term care; information about states with long-term care partnerships under Medicaid; and information about the availability and limitations of coverage for long-term care under Medicaid. The Web site features a number of resources to help individuals start the planning process, including interactive tools such as a savings calculator, contact information for a range of programs and services, and real-life examples of how individuals have planned successfully.

The National Clearinghouse for Long-Term Care Information Web site helps support the principles of the "Choices for Independence Initiative," included in the recently reauthorized Older Americans Act (OAA), signed into law by President Bush in October.

"The new OAA helps empower individuals and supports better planning, improved home and community-based long-term care options, and more flexible and consumer-friendly systems that allow Americans to remain vibrant and independent," Assistant Secretary Carbonell said.
The new Web site also supports the "Own Your Future" education campaign, a joint federal-state initiative designed to increase consumer awareness about planning for long-term care. HHS recently announced new federal-state partnerships with several states designed to help Americans take an active role in planning ahead for their future long-term care needs.

"The National Clearinghouse for Long-Term Care Information Web site is an essential component of the ‘Own Your Future’ campaign," CMS Acting Administrator Leslie V. Norwalk said. "Users can easily find information about services, resources and finances to help them plan for future long-term care needs."

For more information about the "Own Your Future" campaign and the National Clearinghouse for Long-Term Care Information, please visit www.longtermcare.gov

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