Feature Article

Protect Your Future with Long-Term Care Insurance
by Eunice Krieger

     This past summer, a letter was written to advice columnist Ann Landers regarding long-term care insurance. The reader, upon finding out the cost of medical care for her husband, worried about how she could afford it. She wrote, "Please tell your readers they should not only have life insurance, but nursing home insurance, as well. The younger you are, the lower the payments. Urge your readers not to wait until it's too late. Tell them to get smart and get insurance." It is unfortunate that she is still calling this "nursing home" insurance, but perhaps Ann's response is even more disconcerting. "Dear Beaverton: You told them, and I appreciate it because I did not know that such insurance was available. Thanks for educating me as well as millions of others. What you have written could be a godsend."
     Long-term care insurance (LTCI) is beginning to be discussed more commonly, partly because corporations and associations are now offering LTCI to their employees and members. Even the federal government will be offering LTCI to all employees, retirees and military personnel in two years. More responsibility is being placed squarely on the shoulders of individual Americans and their families. The state of Colorado and the federal government have provided new tax credits and tax deductions to LTCI policyholders. The government has curbed spending on two of the providers of long-term care in the past: Medicare home health care funding and Medicaid, which pays for a sizable percentage of the costs of nursing home care.
     Nationwide, the sales of LTCI policies continue to increase. The fact that the policies are contractually providing coverage for home care and assisted living has obviously attracted buyers to purchase these policies. Health Insurance Association of America (HIAA) reported that Colorado is one of nine states having the highest market penetration rate of policies sold (more than 15 percent of people age 65 and over living in the state own a policy). Additional studies show there is a greater awareness of the need to purchase LTCI as part of smart retirement planning; the average buyer is younger, and they are better off financially-perhaps because they are buying younger.
     Because Americans are living longer than ever before, more and more people are requiring long-term care. And costs continue to escalate. According to a study conducted by MetLife Mature Market Institute, nursing home daily charges in Denver average $141 per day, just below a national average of $153 per day. According to this study, Denver is the second-most-expensive city in the nation for home health care. Metro-area residents pay an average of $22 per hour for skilled home nursing care compared with an average of $16 per hour for the same service nationwide. Colorado health industry experts blame Denver's high-cost home care on the city's tight labor market.
     The reasons LTCI buyers are purchasing policies are diverse. High on the list is the desire to avoid depending on family and/or government for their care, protecting assets, and because they want to use their money for leisure activities and quality of life, rather than having to spend it all on long-term care.
     Whatever your reasons for purchasing LTCI, numerous coverage options exist. To find a policy that suits your needs, take the time to learn about what is available.
     AAA Colorado is now offering several different LTCI programs to members. For more information and a no-obligation quote, call 303-753-8800 ext. 8047.

     Eunice Krieger is president and founder of Krieger and Associates, Inc., a consulting firm specializing in educating adults regarding health care issues.

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