Turning Gray into Gold

Turning Gray into Gold
Serving Baby Boomers’ Long Term Care Needs and Tax Considerations

By Robert Quinlan

With nearly 30 percent of the U.S. population retiring between 2010 and 2030, long term care will soon begin to affect many clients and their families in a significant way.

A lot of these families can face long term care costs of more than $120,000 a year in the New York City metropolitan area, often without the time to learn how to deal with the expense or to find good facilities. Knowledge about long term care, then, could create opportunities to serve existing clients and attract new ones. Clients may need help to navigate Medicaid, to cope with providing long term care over long distances, or to locate affordable professionals. Client education and referrals to qualified professionals will help your clients better deal with these situations.

What Is Long Term Care?

A person with an extended illness or disability from an accident may need help with daily activities like walking, eating or getting dressed. Help of this kind lasting longer than three months is referred to as long term care. Long term care today is provided in a wide range of settings, including private homes, assisted-living and nursing home facilities, adult day care centers and hospices.

Medicare pays for a small percentage of long term care costs; clients in a nursing home that accepts Medicare must pay for all costs after 100 days. Medicaid, a program administered by federal and state governments, covers costs for nursing-home stays for people with little assets or income. Medicaid pays a substantial portion of nursing-home costs today.

Private insurers, meanwhile, may cover costs for only a few months, after which clients must look for other options. Many people start paying for long term care services out of their own finances and deplete all they have worked to save, while an increasingly popular way to pay for long term care services is long term care insurance. Most long term care (LTC) insurance policies provide a pool of money for benefit durations from two to 10 years, to life.

Insurance is a good way to maintain independence and flexibility in choosing care in a client’s preferred setting for those who have assets to protect, are currently in good health, and can afford the premium. New York state residents have the opportunity to purchase a special LTC insurance policy—a New York State Partnership for Long Term Care policy—that allows the policy holder to use benefits to pay for up to three years of nursing home stay or six years of home care, after which—under certain circumstances—long term care costs will be paid by Medicaid.

Geriatric care managers also can provide assistance to those who have not purchased LTC insurance and have a long term care situation.

Professionals who understand these basic options can help their clients plan for their and their family’s future.

Robert Quinlan, MBA, LUTCF, is an independent insurance broker based in Goshen, N.Y. He will be teaching an eight-hour CPE course on long term care called “Turning Gray into Gold.” Please see FAE’s online or print catalog for the course description, dates and locations.