Long Term Care Insurance: To Buy or Not to Buy…that is the question.

by Melanie Hasty-Grant

There comes a time when you must talk about the elephant in the living room. For many retirees, this elephant is the topic of long term care. Often when I initially bring this possibility up with my seniors, they look at me as if they would like to wash my mouth out with soap. I understand this apprehension and distaste for the subject. Who, in their right mind, wants to think about themselves or their loved ones spending the end of their life in a nursing home? I was blessed with amazing grandparents who have all gone to Heaven now. I have had the honor of experiencing first hand the struggle that families deal with when making decisions about the care of a loved one. Having cared for them both in and out of the nursing home, the realization of what is involved emotionally and physically for the caregiver, has brought much wisdom to how I deal with my clients about this topic.

So, let’s talk for a minute about the positives and negatives of long term care insurance. Obviously, one of the positives of having this type of insurance is that if your family finds itself having to make this kind of decision, it will be less stressful financially. Many long term care policies allow for care to be given inside an assisted living or nursing home setting, as well as at home through a home health agency. This type of arrangement benefits the ailing family member by getting the care that they need while still remaining at home. It also relieves the caregiver of the often unbearable physical and emotional demands of caring for a loved one full time. The most common rationale I hear for NOT buying Long Term Care insurance is that folks plan to rely on their spouse or their children to take care of them at home until they die. They may also believe that their insurance and/or Medicare will cover the expense. Health insurance and Medicare do not cover long term care. In addition, in order for Medicaid to kick in and start paying for long term care, the person’s assets have to go through a “spend-down” to allow for coverage. This, my friends, is a horrifying proposition. The federal guidelines for the spend-down for a married couple are that the “community spouse” who is the spouse of the nursing home resident is limited to one half of the household assets up to $109,560 (2011). They can keep their home (so long as the equity in the home is not more than $500,000), and one car. (Medicaid.gov). I have seen families go through this process. Trust me; you don’t want to do this!

Okay, so let’s talk about the negatives of long term care insurance. It is expensive and you have to use liquid assets to pay for it. You may not need it and then you have paid for nothing. It is true. Depending on how old you are, when you buy it, if there are existing conditions, and how much you want, it can be a huge commitment. However, new options have recently become available that allow you to keep your money relatively liquid, change your mind and get your premiums back, and repay your family if you don’t use it. If you haven’t looked into options in the last few months, it is time to do it now. Take care of yourself. Take care of your spouse. For more information go to www.waterstonewealth.com or call 918-272-1120.

Melanie Hasty-Grant, Experienced Licensed Professional Counselor and Managing Principal at Waterstone Private Wealth Management. Securities offered through Cetera Advisor Network LLC. Member FINRA, SIPC.