Long term care benefits from Medicare are very limited. And to qualify for Medicaid, you must first spend down to the poverty level. Medicare will pay for the first twenty days of facility care and all but $97.00 of the next eighty days. Your supplement or HMO will pay the $97.00 for the 80 days, so all in all you will have 100 days in a facility, if your have been in the hospital for at least three days and are improving while you are in the facility. In other words Medicare and the supplements will not pay for any custodial care.

Medicare will pay 100% of all Home Care costs up to a $1,600.00 maximum per year if you are homebound (meaning you can not go out, except to the Doctor’s office) and the care is ordered by your Doctor and is deemed Medically necessary.  Generally Medicare provides for three visits from a skilled provider per week and two or three visits from an aide. They are no twenty-day limits as rumored. Remember that there is a $1,600.00 limit per year.

So unless you can afford to use your life savings to pay for long term care, what is your alternative?

       At what age should you buy Long Term Care?

The best age for someone to buy Long Term Care is age fifty-four. To best explain this let's say that an individual purchases a low option policy that will pay one hundred dollars per day for a three year benefit, or a pool of money that will pay out a total of one hundred nine thousand five hundred dollars. ( for this example no options have been added to the policy)

If the purchaser does not access their policy until age eighty-five, they will have paid in a total of fourteen thousand one hundred dollars. If they wait until age sixty to purchase the same plan, they will pay a total of sixteen thousand seven hundred fifty dollars by the time they are eighty-five. Wait until age sixty-five, pay nineteen thousand two hundred dollars by eighty-five. Wait until age seventy, and pay a total of twenty three thousand four hundred dollars by age eighty-five.

Or you can wait until age seventy-nine, the age some companies last issue Long Term Care policies, and pay a total of twenty seven thousand one hundred dollars. If, during the time a person waited beyond age fifty-four, if they developed health problems, they might not be able to purchase a Long Term Care policy. style="margin-left: 10px" align="center">I am in my fifties and think that I should wait until I am older to purchase Long Term Care insurance. Am I right?

I am in my fifties and think that I should wait until I am older to purchase Long Term Care insurance. Am I right?

In a word, NO, you are wrong. Let’s look at a policy from a leading insurance company to see how this works.  The policy we will look at is a comprehensive plan with a Daily benefit of $120.00 per day, 5% compound inflation protection, with benefits lasting four years.

1. If you were to purchase this plan, providing for inflation, with your spouse at age 50, the plan would cost $835.00 per year, purchase the same plan at age 55, $1130.00 per year, age 60, $1945.00 per year age 65 $ 3370.00 per year.

2. When you extend these figure up to age 85, you will find that the younger you are when you buy, the cheaper Long Term Care insurance is, in the long run.

3. Remember that the younger you are, the healthier you are and medically qualifying for Long Term Care is easier. (Inflation protection calculated at 5% compounded per year.)

I am sixty years old and healthy. How much more will it cost me to wait until I am seventy?

1. Let’s make the assumption that you will need Long Term Care when you are eighty-five, and that you would have purchased a policy at age sixty. A plan with all the bells and whistles would cost you about $1800.00 per year or a total of $45,000.00 by the time you are eighty five.

2. If you waited, purchased the comparable coverage at age seventy, you would pay about $5800.00 per year or a total of $87,000.00 by the time you were eighty-five.

3. During the ten years that you were waiting, if you became ill, you might not be eligible for Long Term Care Insurance. So you can see that waiting is not in your best interest.

Please let us know if you have questions on this important form of health insurance as you or your parents get older.  For more information call Peter Hegeman at: (407) 425-9347