Long Term Care Insurance
The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68%. AARP Beyond 50: A Report to the Nation on Independent Living and Disability, 2003. The national average cost of care for just 1 year in a nursing home or with full-time home care is approximately $60,000. In major cities like Boston, Miami, etc. long term care can be as high as $75,000 to $100,000 annually. Many people that have built up a nest-egg understand this risk and are not ignoring it as they want to keep their financial independence and also not see their nest egg fully eroded in a period of 2-5 years.
Medicare only covers 90 days of long-term care following a hospitalization, so the rest is up to responsible planning. The good news is that states such as Florida have taken steps to protect the assets of individuals that have taken the initiative to acquire at least some long term care insurance (www.floridashine.org/docs/LTC_Partnership_fctsht.pdf). What does that mean for you?
Medicaid requires individuals to spend down their assets to $2,000 in order to qualify for LTC. There are strict rules and penalties for transferring assets to qualify for Medicaid. However, if you are set up with a properly designed LTCI insurance plan that is a partnership member, and for example $200,000 is paid out in long term care expense, you can qualify for Medicaid assistance while still retaining up to $200,000 of your personal assets.
We can help you design a policy that will qualify for the partnership program and suit your needs. Also, ask us how we may be able to help you deduct the premiums from your taxable income!