If you’re like most people, you’ve heard of long-term care. And, like most people, you might not really understand how it factors into your retirement. Unfortunately, this is one instance when what you don’t know could hurt you. The risk of needing long-term care is real. It’s also something that most people try to put off thinking about until it’s too late.

Basically, long-term care is necessary when you have difficulty caring for yourself. If you’ve ever cared for an aging parent or loved one, you’ve seen how frustrating it is to no longer be able to do things you’ve always taken for granted.

Who Pays For Long Term Care?
In most instances, the answer is not the government. They recently rolled out a nationwide long-term care awareness program called “Own Your Future” which encourages people to better understand and plan for long-term care. In fact, Congress has tightened the financial requirements to qualify for Medicaid, the federally and state-funded program for those who live at or below the poverty level. And Medicare is designed to cover acute illnesses like hospital stays but not long-term care.

It’s clear, that the average person will be responsible for covering long-term care expenses privately. But, the average cost of long-term care is over $75,000 annually. Will you be able to self-fund care for yourself or your spouse? Coming up with that kind of money might prove difficult for many people.

What Can I Do?
Fortunately, many insurance carriers are offering insurance plans developed specifically to cover the costs of long-term care. But with so many plans out there, how do you choose the one that’s right for you? The easiest way is to start with the basics.

Long-term care insurance pays benefits when you require services covered under the policy. However, most plans have an elimination or waiting period (think of this as a policy deductible) that must be satisfied before they’ll begin to pay. You choose the elimination period based on how much out-of-pocket expense you can afford. The shorter the elimination period you select, the higher the premium; and the smaller your out-of-pocket expenses will be when you actually need care. Many policies offer choices from 0-180 days, in some states even longer.

The next factor is how much you will need each day for care. If care in your area is around $200 a day and you think you can fund about $50 of that, choose a daily benefit of $150. And remember to consider inflation. With long-term care expenses rising continuously, you will want to add a rider that automatically increases your daily benefit by a certain percentage each year.

It’s also important to consider where you want to receive care. Most policies pay for care whether it is received at home, in a nursing or in an assisted living facility. And while you might need to go to a facility eventually, most of us want to stay home as long as we can.
With all of the choices out there, it helps to consult a long-term care specialist before making any decisions. Our professionally trained agents have the training and experience to help you determine if long-term care insurance is right for you and make sure you get the benefits you need, so you don’t have to settle for a plan that wasn’t designed for you. Because we are Independent Brokers, we have access to several companies, so we can help you understand the differences in policy offerings, pricing, and underwriting.

Be sure to utilize this expertise to make an educated decision about whether long-term care is right for you.

Minnesota Partnership Program
Minnesotans who do not have long-term care insurance can have the state pay for their long-term care through the state’s Medical Assistance (MA) program, but only if they meet certain asset limits. This means they must first use all of their own income and assets to pay for their care before the state will begin paying. Once on MA, a person is only able to keep some of their income for personal needs and for supporting certain family members, but must use their remaining income to pay for their care.

What is the LTC Partnership Program?
The LTC Partnership Program is a program for long term care coverage that combines the use of private and public resources. In return for buying a private insurance policy, you are allowed to keep more of your assets if you decide to later ask Medical Assistance (MA) to help pay for your LTC services.

How does the LTC Partnership Program work?
You buy Partnership coverage through an insurance agent, your employer or an organization you belong to. If you already have a LTC policy, you may be able to convert it to Partnership coverage. Contact your insurance company for details.

• You use all of the Partnership policy benefits to pay for your Long Term Care needs.
• You apply for MA if you still have Long Term Care needs and MA will set aside assets equal to the amount of your Partnership policy and will not count when determining your eligibility.
• During your life or during the estate recovery process, MA cannot take the assets that you set aside.

For example, if you buy a Partnership policy that pays $100,000 in benefits, you can apply for MA after those benefits have been used and MA will not count $100,000 of your assets toward the MA asset limit. You can also protect that amount in your house or other real property if the State files a lien on the property.