Monday, June 10, 2013

Columbia, SC Long Term Care Insurance Or Crisis Management? The New Law


According to the National Center for Health Statistics, some 1.6 million people currently reside in nursing homes. That number is likely to increase significantly as baby boomers become seniors. This year, the first baby boomers turned 60 years old, and most of them are ill prepared for what the future holds if they live a long time.

Recent legislation makes it more difficult for Americans of limited means to depend on help from the government to pay for nursing home costs through Medicaid. The Deficit Reduction Act, signed into law in by President Bush in February of 2006, tightens restrictions for nursing home eligibility to anyone who gives away assets to charities or family members for less than fair market value. The so-called "look-back period" for these asset transfers has been extended from three years to five.

Staying Self Insured

The average daily room rate for a private room in a nursing home in North Carolina is $168.74 per day ($61,590 per year). In South Carolina, the average for a private room is $151.97* ($55,469 per year). The average length of stay in a nursing home facility is about two-and-a-half years, according to the National Center for Health Statistics. If the rate of inflation was just 5% you could expect the average cost of nursing homes to double by 2021. If a baby boomer turned 60 this year and had a stroke at 75 years of age, he could expect to pay well over $250,000 for a two-and-a-half year stay in a Carolina nursing home, - but - who is average?

Genworth Financial, one of the leaders in the long term care insurance industry, found in their most recent claims study that claimants were being paid claims longer for stays in assisted living facilities than they were for nursing home stays. In the same study, the average length (days) of home care on claims filed from 12/1/1974 through 6/4/2004 was 523 days. What does that mean? Could it be that people with long term care insurance policies want to stay home and their policy helps them do just that? As percentage claims filed this year by policyholders of the insurance company with the most LTC insurance policyholders (Genworth Financial, formerly GE Financial Assurance) was over 75% were home care claims. Given the new law, the Deficit Reduction Act, and what you think your chances are of needing care before you pass away, does it make sense to self-insure? A lot of people do not think so. Many think of this insurance the same way they think of car insurance, fire insurance and major medical insurance. They are hoping they waste their money and never have to file a claim. They do not think it is smart to gamble.

If you do decide that long term care insurance is a sensible way to plan for long term care, obtain A Shoppers Guide to Long-Term Care Insurance from your Department of Insurance or from a long term care insurance specialist, and study it. In most states, state law requires any insurance companies or agent you meet with to give you this guide to help you better understand long-term care insurance and decide which, if any, policy to buy. Call the number below for a free Shopper's Guide and a free copy of a 16 page booklet, Should I Buy Long Term Care Insurance? Or Would I Prefer Crisis Management?

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