 | Charlie Traffas has been involved in marketing, media, publishing and insurance for more than 40 years. In addition to being a fully-licensed life, health, property and casualty agent, he is also President and Owner of Chart Marketing, Inc. (CMI). CMI operates and markets several different products and services that help B2B and B2C businesses throughout the country create customers...profitably. You may contact Charlie by phone at (316) 721-9200, by e-mail at ctraffas@chartmarketing.com, or you may visit at www.chartmarketing.com. |
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2001-12-01 16:44:00
Medicare will take care of everything, right?
Question: "I don't need Long Term Care (LTC) insurance. Medicare will take care of everything… right"?
Answer: If it's any comfort, your thinking parallels most thinking. The only problem is that it is wrong. There is a common misconception among Baby Boomers that some 'special plan' exists that will look out for them in their old age. They think, "The government will take care of me." They don't realize that Medicare pays just 2% of nursing home costs and about 15% of all home health-care costs.Most people fail to realize that Medicare coverage is intended for acute, catastrophic illness and requires hospitalization and treatment by a physician. Medicare does not cover the daily care required by people who suffer from progressive conditions such as arthritis, diabetes, Parkinson's disease, or Alzheimer's disease. Medicare also does not pay for assistance with basic activities of daily living (ADLs), such as toileting, dressing, bathing, eating, ambulation, mobility and continence. Long Term Care insurance is the only 'vehicle' that exists as a coverage to pay for these types of care. Medicare pays the first 20 days for skilled care only. Ninety five per cent of care currently being provided in nursing homes and assisted living residences does not qualify as skilled care.Question: "I may never need long-term care. What if I never go to a nursing home?"Answer: According to a 2000 Gallup Poll, 76% of persons polled believe they will never need a nursing home, assisted living, home health care program, or any other kind of long-term care, yet a 1999 American Health Care Association (AHCA) report indicates that one in two people will eventually need some form of long-term care. The same argument could be made for homeowners insurance. Why buy it? Your house may never burn down, blow away, or suffer a major loss, yet most every home in America has insurance coverage. It even gets more real when you figure the average home is valued at $112,000 and the chance that will suffer a major loss in its lifetime is only 1 in 88. Now compare the numbers… 1 in 2 (50%) for long-term care, and 1 in 88 (1.13%) for your home. Your home is valued at 'x', and the cost for a confinement in a nursing home, assisted living residence, dementia care facility or care at home could be several hundred thousand dollars. If you are like most people, you could come much closer to rebuilding your home if you lost it without insurance than you could pay for long-term care. The ‘1 in 2’ number is for all persons of any age. The longer a person lives, the greater the chance for a chronic illness. Women and men age 85 and older are the fastest growing segment of the population, and the group needing these types of care the most. One should not make the mistake of concentrating strictly on nursing home care. Home health care is becoming more and more popular. The main goal of today's seniors is to stay home as long as possible. It will be even more so for Baby Boomers. Depending upon the amount and level of care needed, home health care can be as expensive, if not more, than nursing home care.Question: "Why can't my kids take care of me?"Answer: This again is a very common statement. Many children move away from home after college, but parents still behave as though their children live right down the street. Even if they do, it is unrealistic to think they can or will give up their own lives to take care of their parents. Yes, they will say they will because they imagine you needing care, as you are today… healthy. Put them in a situation where they are assisting you with bathing, dressing, eating, toileting, etc. on a daily basis and the 'tune' changes quickly. Further, if there is more than one child involved, there may be different opinions on how and what kind of care is needed. Some of the family may be willing to help, while others may not, thus creating strain in the family unit. Still, many times, due to limited resources, disabled elderly living at home rely on their families for care. As a result, adult children who work while providing care for their elderly parents typically experience stress unknown to earlier generations. In an AHCA study, 80% of working caregivers reported emotional strain, 50% reported financial strain, and 40% missed work regularly to care for an elderly loved one. The same study also found that 41% of women caretakers had quit their jobs or taken a leave of absence, 50% had cut back their working hours and give up space in their homes to accommodate elderly parents, and 67% reported bouts with clinical depression.People should only buy Long Term Care insurance if they have something to protect in the way of income and/or assets. If they have little to protect, there is Medicaid to assist in such situations (you must qualify under income and assets). In addition to protecting income and assets, a Long Term Care policy can significantly relieve the stress and strain normally experienced with the need for this type of care for everyone, while providing peace of mind and maintaining one’s independence.
