People are living longer these days.
That’s good news. But, the longer
people live, the more they’re at
risk for developing serious health problems. It is troublesome to consider the
possibility of health problems and the
need for assistance with basic daily
activities, such as eating, bathing and
dressing. But, statistics show that by
the year 2020, 12 million Americans will
require long term care (LTC).
Not only that, approximately 19 percent of Americans over age 65 will
experience a chronic physical impairment requiring LTC.
LTC refers to a wide array of medical
care, personal assistance and social support services for people who are physically or mentally unable to independently care for themselves for an extended
period of time. This care can be provided in a nursing home, assisted living
facility or in one’s home. Though LTC is
generally for older people, a younger or
middle-aged person who was in an accident or suffered a debilitating illness
might also need LTC services.
Many employers are offering their
employees LTC insurance. This insurance is designed to help pay for medical
and nonmedical care services that
would otherwise be paid out of pocket.
Some policies cover only nursing home
care while others include coverage for a
range of services, including treatment
in an adult day care center or assisted
living facility, medical equipment, and
formal and informal home care.
“Employers can distinguish their benefit plans and offer valuable LTC coverage to their employees more affordably
than they may expect,” says Jessica
Galardini, the president and COO of
JRG Advisors, the management company for ChamberChoice. “Also, you can
offer coverage to retirees, spouses, parents and parents-in-law. And generally,
employees don’t have to pass any medical requirements.”
Smart Business spoke to Galardini
about LTC insurance and how it can
make your employees’ golden years
truly golden.
Who needs LTC insurance?
Similar to auto, home and health
insurance, LTC insurance is available to
help protect you, your family and your
assets. It is impossible to predict what
type of care you might need in the
future or know exactly what the costs
will be.
Like other insurance, LTC insurance
allows people to pay a known, affordable premium for a policy that protects
against the risk of significantly higher
out-of-pocket expenses. LTC services
can be very expensive and the real
amount you spend depends on the level
of services needed and the length of
time you need care. One year in a nursing home can average more than
$50,000. In some regions, it can easily
cost twice that amount.
For couples age 65 and over, there is a
75 percent likelihood that one partner
will need LTC. Generally, LTC is not
covered by health insurance plans. Nor
does Medicare cover it. Medicaid, a federal/state health insurance program,
will only pay for it if someone has already spent most of their savings and
other assets.
With soaring health care costs, insurers increasingly restricting coverage
and eligibility, plus people’s need to
stretch retirement savings over more
years, it is a good idea for everyone to
seriously consider LTC insurance. LTC
insurance can help you protect your
assets, minimize your dependence on
other family members and control how
you receive LTC services.
When should you purchase LTC insurance?
Many people do not think about LTC
until they are in their 70s and 80s and
their health begins to fail. At these ages,
a person may be too high a risk for an
insurer to cover them, or if they do
qualify, the premiums can be astronomical. Some insurance policies have
restrictions on age and health status. It
is best to purchase LTC insurance at a
younger age, when you are likely
healthier.
How much does LTC insurance cost?
The cost of LTC insurance varies
widely. The premium depends on factors such as special features or riders
selected, including age, level of benefits, and the length of time a person is
willing to wait before benefits begin.
Premiums generally remain the same
from year to year. The younger a person
is when he or she initially purchases an
LTC policy, the lower his or her annual
premium will be.
There are many factors to consider
when facing the decision to offer LTC
benefits to employees. It is important to
explore all of your options and to work
with an adviser who will ensure you are
purchasing a plan that will meet your
coverage and asset management needs,
while remaining within budget.
JESSICA GALARDINI is the president and COO of JRG Advisors, the management company for ChamberChoice. Reach her at
(412) 456-7231 or [email protected].
