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Charlie Traffas
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.
What's New
2004-10-01 15:07:00
LTC insurance? I have Medicare.
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.  Medicare pays the first 20 days for skilled care only, but 95% of care currently being provided in nursing homes and assisted living residences does not qualify as skilled care.  QUESTION: So, what happens if I need the care.  How is it paid for?ANSWER: There are only four ways to pay for this care:  (1) you use your own income and assets; (2) your family chips in and covers the expenses with their income and assets; (3) you go through your income and assets to the point that you can qualify under Medicaid; or (4) you try and get yourself a Long Term Care policy.QUESTION: What are the odds of needing long-term care?ANSWER: Good question... first, let’s look at some statistics.  According to a 2003 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 2002 American Health Care Association (AHCA) report indicates that one in two people will eventually need some form of long-term care.  When considering whether or not to buy LTC insurance, 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 show me a home that doesn't have insurance coverage.  It even gets more real when you figure the average home is valued at $132,000 and the chance that it will suffer a major loss in its lifetime is only 1 in 88.  Now, take another look at 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 throughout the life of the care.  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.  Most people mean it when they say they would not be able to sleep at night if they did not have insurance to replace their home or vehicle in the event it burned down, blew away or was totaled for some reason. Yet, the potential loss of a home or a vehicle pales in comparison to the loss incurred for a long-term care confinement… and the loss is apt to occur as much as 4400% more often!  A long-term care confinement at today's costs (these costs are rising at a pace of approximately 3 and 1/2% a year) could easily reach as much as $400,000 or more over the term of the confinement.  Over 94% of all persons past the age of 65 have no insurance to cover any of this loss!  It makes you wonder why some people so diligently plan their retirement, yet leave it all exposed to something that could be remedied for so little.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 and the need for long-term care.  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 and Assisted Living are much more popular.  The main goal of today's seniors is to stay home or in a homelike environment as long as possible.  It will be even more so for Baby Boomers.  Next month we will talk about what assistance, if any, may be received through Medicaid, for long-term care, as well as what it takes to qualify, the rules involved, the Spousal Division of Assets, and the income guidelines.
 
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