Take a Long Look at Long-Term Care -- Long Before You Need It
With the average cost of a nursing-home stay running at around $76,000 per person annually, it’s more important than ever to look at long-term health care insurance.
A policy may not be needed for those expecting to qualify for Medicaid. But not everyone meets Medicaid eligibility requirements in Michigan or other states. Limits for income and assets are lower you think.
If you’re shopping for long-term care coverage, here are five things you should keep in mind:
The reliability of the insurer: Check with the Michigan insurance department about the insurer's track record of paying claims. The industry's three dominant insurers – Genworth, John Hancock, and MetLife – all have decent records of paying claims. In recent months, some smaller insurers have refused to pay.
The depth of the coverage you choose: The experts say your coverage should kick in when you can’t do two activities of daily living, such as bathing. And if spending your final days in your own home is important to you, pick a "comprehensive policy" as it would cover a wider range of settings.
Your age: If you’re 55, buying coverage now will cost $1,095 a year, on average, according to the American Association for Long-Term Care Insurance. Couples can sometimes lower their rates by buying coverage together. You could pay more if you buy later in life – but buying a policy while you're young doesn't guarantee protection against premium increases.
Benefit levels: Average policies pay daily benefits of $50 to $500 – usually for two, three, four or five years. Determine how long you could – or want to – cover your expenses from other sources before the policy's benefits kick in. The longer you can wait, the cheaper the policy.
Places to buy coverage: If you have assets to protect, you may want to think about buying a policy through a state's long-term care partnership program. Many employers also offer long-term care coverage. Associations are another option. For example, Uncle Sam offers coverage to federal employees, retirees and their families.
– By Ed Coury, senior editor and Midwest bureau chief for the Wall Street Journal Radio Network, Dow Jones & Co., and a reporter for WWJ Newsradio 950.
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With the average cost of a nursing-home stay running at around $76,000 per person annually, it’s more important than ever to look at long-term health care insurance.
