If you are concerned with financing long term care costs – for you or a loved one – don't miss this free presentation Tuesday, May 24th at 4:30 pm at Aaron Manor. I will be presenting on strategies to cover care costs with Susan Suben, the President of Long Term Care Associates, Inc. Here is all the information you need. Please do register as we have been told space is limited.
I recently met with a new client, who mentioned he had a long term care insurance policy. He had not brought the policy with him to our consultation so I asked, "Do you know if your policy is a partnership policy?" He answered "Everything my wife and I did in our 57 year marriage has been a partnership." Very touching, but clearly he knew nothing about a policy that he has been paying premiums on for years. I thought it was time to add a link with some information to this site in hopes that others might benefit from it. For those who do not know, a partnership policy for long-term care has special benefits that non-partnership policies do not. The biggest benefit is that if you have a partnership policy and use up all of the benefits under it you can automatically qualify for Medicaid assistance. There are variations, however, and not all policies are alike. Since 2006 we have "total asset protection" policies and "partial asset protection" policies available to us. I have written about this before; your financial advisor may not be the best person to sell you this insurance. You need someone who specializes in long-term care policies so that you receive proper advice tailored to your situation. Once you know the appropriate policy for you you should then go back to your advisor to work out the best method to pay the premiums (here is a good way to bleed out an annuity you purchased before you learned how bad they are for most people).
The New York State Partnership for Long-Term Care has great "faqs" on partnership policies. Check out the frequently asked questions here. When you are ready to explore further, please call me to discuss how these policies (and non-partnership policies) can streamline your long term planning options. If you're already researching and need a licensed expert to sell you the appropriate policy, please call me for referrals.
This story was published about a month ago just after the new health care legislation was signed into law. Note that Fidelity bases its anticipated costs on people retiring at age 65 and does NOT include long term care costs, either in the community or a nursing home.
Have you called your financial advisor yet? Isn't it time to seriously consider long term care insurance? Do not be fooled into thinking that you can only use a New York State Partnership policy, which is excellent for many folks, but long term care insurance is not one-size-fits-all. If your financial adivsor is not licensed to sell long term care insurance or is captive, meaning only a few options are available, find an independent long term care advisor like Susan Suben, who will review all your options with you. (Advisors who are captive to brokerage firms can often only sell certain policies while an independent agent will be able to search the universe of plan options.)
If you cannot qualify for long term care coverage – remember, there is a medical underwriting component and it gets tougher every year – see an elder law attorney now to see what your options are for paying for care in the future. Community care options abound in New York. But you have to look into options while you are healthy and you have to be willing to accept assistance. If you wait for crisis and then attempt to "plan" you are not planning at all.
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Sometimes I receive an email or a newsletter and just have to share it. The link below will take you to a recent issue of Client Advisor from Eaton & Van Winkle LLP in New York City, courtesy of Jeffrey A. Asher, Esq., which provides a really good overview of long term care insurance and the tax benefits available for purchasing it, assuming it is the right product for you.
If you are in the Rochester, New York area I would be happy to discuss your long term care insurance questions and provide you links to trusted long term care insurance providers who will work to suit your individual needs just like I do.
My friend and colleague, Susan Suben, CEO of Long Term Care Associates, Inc., recently sent me this column in her spring newsletter. For more information, you can contact Susan at email@example.com visit her website, www.LongTermCareAssociates.net. Susan regularly writes and presents on this complex topic, and she can assist you in making the appropriate choice for your own policy needs.
When thinking of purchasing long-term care insurance, one should carefully consider the advantages of several NYS Partnership plans now available.
When it was created in 1993, the NYS Partnership was intended to help individuals plan for long-term health care needs and, at the same time, remove the cost of such care from state Medicaid budgets. The double goal was to benefit individuals specifically and taxpayers generally.
The original Partnership plan offered 3 years of nursing home care or 6 years of home/assisted living care, after which the policyholder could apply for Medicaid without having to spend down their assets, and without any look-back or penalty periods. The only requirement was that income would be contributed to the cost of care according to Medicaid guidelines.
Fifteen years later, the Partnership has over 60,000 policies in force, and added three new options for a total of four available plans: two total asset protection plans, Total Asset 50 and Total Asset 100; and two partial asset protection plans, Dollar for Dollar 50 and Dollar for Dollar 100. The 50 and 100 notations mean that a policyholder would receive either 50% or 100% of their daily benefit for home care/assisted living.
The partial asset protection plans are geared to individuals with moderate income levels and fixed assets, such as a house. They protect assets equal to the amount of benefits paid out by the policy. Any unprotected assets are subject to Medicaid liens and look-back periods.
The Partnership plans have several advantages over traditional or non-partnership plans. Premiums are generally lower, especially with Dollar for Dollar policies, because many of the enhancements and riders available with traditional policies are not available with carriers approved to sell the Partnership plan. Such benefits include different inflation options and shared care benefit riders. However, although the coverage is more basic, it is not necessarily less comprehensive.
For example, Partnership policies include all levels of care found in traditional policies, including home care (skilled, custodial and personal care), adult day care, assisted living, nursing home care, case management and respite care. Some Partnership plans even allow use of independent home care providers, or care by friends or family members.
Partnership policies also include inflation protection as a basic feature, one of the most important features to have in a long-term care insurance policy. The Partnership has a 5% compound inflation factor that becomes optional at age 80, which insures that your policy will have actual value when you need it. In a non-partnership plan, inflation protection is a rider that must be purchased separately, which could substantially increase the premium.
One possible drawback of a Partnership plan has historically been the limitation of asset protection if the individual moves out of NYS, which has been a factor for many people who decided against the plan. That is, you can use your Partnership benefits anywhere in the country, but you can only apply to NYS Medicaid to protect your assets, if you exhaust your benefits and still need care, for which you need to reside in NYS.
As a practical matter, with current plans, the Partnership may still be a very good choice even if you move or retire out-of-state. With a traditional policy, if you move out-of-state, exhaust your benefits and still need care, you will have to spend your assets for your additional care, which is the same scenario as the Partnership policy if you reside out-of-state. However, by choosing a Partnership Plan, you will probably pay less in premiums over the years, and will always have the option to return to NYS to take advantage of Medicaid to protect your assets.
Moreover, under the Deficit Reduction Act of 2006 and with the creation of partnership plans in states throughout the country, there may soon be reciprocity between state Medicaid departments that would permit Medicaid asset protection after policy benefits are exhausted without returning to NYS.
If, in seeking long-term care insurance to protect your assets and transfer risk, you need or wish to be economical, then a Partnership plan may be a very sound alternative for you.