Long term care insurance was sold aggressively in the 1980s, 90s and thereafter to offset the costs of seniors needing to live in a nursing home, assisted living or needing at home health care. Now, however, the business of long term care insurance has dramatically changed. What was once over 100 insurers providing LTC policies for sale has shrunk to a pool of less than twenty insurers. The big financial problem was that the majority of insurers had badly underestimated the longevity of these long term care policy holders and how many claims would be filed during their lifetime. The model became unsustainable from a business perspective. From an estate planning perspective this means that persons entering their middle age need to consider revamping their estate plans to account for this change.
As reported by the Wall Street Journal HERE the industry is now in financial turmoil; the translation being that millions of people age sixty-five or older with long term care policies are potentially facing steep rate increases. It is not uncommon for a policy holder to face a fifty percent increase in their premium while some of the worst cases are upwards of ninety percent. Policy holders are seemingly left with two choices: Pay the money or leave your coverage after paying into it for years, and sometimes decades.
What if you want a different choice? Everyone would agree that paying higher premiums as you age is difficult but if the policy is discontinued what then will happen to the peace of mind long term care brings? What was once the safety net of senior aging care (without becoming a burden to family members) is rapidly disappearing. CNBC has recently reported HERE about this very issue and suggests getting financially creative for long term care.
There are a multitude of ways that an individual in need of help can qualify for Medicaid, which pays for nursing home care and services. This does not mean the legacy you built during your lifetime will not go to your selected inheritors. On the contrary, there are a number of legally recognized asset protection strategies that can be utilized to help you protect your assets while quickly qualifying for Medicaid. To begin, you will need to retain the services of a qualified elder law attorney who can guide you through the process. Forbush Legal does this on a daily basis for our clients, frequently working closely with your accountant and a financial advisor to develop and implement the best strategies.
Whether you are engaged in “crisis planning” by assisting a loved one in getting qualified for Medicaid quickly while protecting the largest amount of assets, or “proactive planning” with an eye towards long-term asset protection, with proper planning and the use of the correct tools one can be fully prepared to face the challenges that long term care can present. Though you may never have thought you would find yourself creatively trying to qualify for Medicaid while protecting assets, Genworth Financial reports the national median cost of a private nursing home room to be $97,455 a year. It doesn’t take long to burn through precious resources at that cost without long term care planning.
Now with time on your side it becomes critical to act fast and select the right vehicle for planning. Contact our office today and schedule a complementary appointment to discuss how we can help you