How long term care insurance helps you
7:55 a.m. Friday, June 27, 2008
"Long term care insurance is one way for folks to plan, and we encourage people, if they're thinking about retirement, long term care insurance could be part of a good retirement plan," Kansas Insurance Commissioner Sandy Praeger said.
Here's how a long term care plan can protect your savings. It's called the "Partnership Program."
To become Medicaid eligible, you can't have more than $2,000 in assets. That's not much to live on for the rest of your life.
But if a person has purchased a two-year Long Term Care insurance policy and the insurance has paid for one year of nursing home stay at $50,000, then that person can become Medicaid eligible once they spend themselves down to $50,000 in savings, as opposed to the person without Long Term Care insurance who only has $2,000 in the bank for the rest of their lives.
"The average cost of a nursing home stay in Kansas now is over $50,000 a year, so it can deplete your resources quickly. But it's not just asset protection for families. It's asset protection for the state," Praeger explained.
It's protection for the state, to make sure the money is there for those who really need it.
"And that's the fear, that we're going to spend so much money on long term care services that we're going to bankrupt the state," Praeger added.
It's a scary thought at a time when more people than ever before are heading toward retirement, many of them counting on the state to foot the bill.
"The baby boom generation, as it goes into retirement, and that's started, there will be more people asking questions. We hope! We want them to, because as the baby boom generation ages, we know state Medicaid programs will not be able to keep pace with the growing budget concerns," Praeger said.
And that's what Long Term Care insurance is there for, to protect you, if the state can't.
Commissioner Praeger says her office fields more and more calls about long term care insurance.
But, she says the number one topic they answer questions about is still car insurance- by a long shot.
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