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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○FINANCIAL HEALTHLong-Term Care: AnIssue You Can’t Affordto AvoidMALACHY WHALENLong-term care (LTC) is a subject that all Americansshould consider in their overall financialplanning because it is for that period in our lifewhen we can’t take care of ourselves or need assistance toperform the activities of daily living. It includes medicaland non-medical care for people who are critically ill ordisabled from an accident or an illness.Why do we need to be concerned?A critical illness or accident can be financially devastatingregardless of age. While LTC is thought to be forolder people, it is actually applicable to younger people aswell because it applies to anyone who is critically ill ordisabled. A major insurer offers statistics that show 40percent of people who receive LTC are between the agesof 18 and 64.A recent study by the U.S. Department of Health andHuman Services indicates that anyone who reachesage 65 has a 40 percent chance of entering anursing home, with a 20 percent chanceof staying there more than five years.While a very sobering statistic, itdoesn’t include the tremendousamount of pre-nursing home healthcare and assisted living care thatmight be needed.Overwhelming costThe cost for LTC is overwhelming.Nursing home expenses exceed $100,000 a year in mostcities today and is increasing every year. Average costs inthe United States in 2009 included:• $198/day for a semi-private room• $3,131/month for care in an assisted living facility(one-bedroom unit)• $21/hour for a home health aide• $19/hour for homemaker services• $67/day for care in an adult day health care centerThese are the national averages, but a local example ofnursing home charges in the Pittsburgh area shows $224/day for a semi-private room and $340/day for a privateroom. These are realities that must be faced by all of us,so what are possible solutions?Solution #1: Do Nothing. Your assets must besubstantial to afford $100,000 a year or more from yourinterest or investment income and stillhave enough for the rest of the familyto live comfortably. Of course, if yourspouse goes into a LTC situation atthe same time, you are looking at$200,000 or more a year. If youhave to start using the principal ofyour savings, home equity andretirement funds, they will depleterapidly and perhaps be exhaustedcompletely depending on howlong you need LTC.26 Bulletin : January 2011
FINANCIALSolution #2: Move into a retirement community.This entails buying into the concept of living in a communitysetting where essentially all your needs are takencare of. You buy an independent living unit such as anapartment, townhouse or villa. The community willprovide for most of your daily needs, as well as assistedlivingaccommodations or nursing home care if needed.While it sounds good, this solution is expensive, includingthe original buy-in price plus a monthly fee that isadjusted for inflation. In addition, you need to carefullyexamine the business’s financial stability basis. Finally, youmust be in good health to secure full coverage, which isexpensive, but an option that should be considered.Solution #3: Medicaid. There are very restrictiveincome and asset provisions that need to be met. Even ifyou plan ahead, it is not a very satisfactory solution.Solution #4: Life insurance policy accelerated benefits.Most policies will allow you to use a portion of your faceamount to cover expenses if your life expectancy is undertwo years. If you chose this as a solution, you shouldcheck your life policy to make certain it is included andalso read the definitions, as they vary. A competentinsurance broker will assist you in understanding coverageand your options.Solution #5: A combo life insurance policy withbuilt-in LTC. One high quality insurer offers this onpermanent insurance policies of up to $1,000,000 ofcoverage. The policy has an LTC rider that allows you totake a percentage of the face amount per month whenyou qualify for long-term benefits. For example, a$1,000,000 policy provides:1% = $10,000 per month for up to 100 months2% = $20,000 per month for up to 50 months4% = $40,000 per month for up to 25 monthsThere are real advantages to this because it answers thequestion:“What happens to all my premiums if I don’tneed long term care?” It also allows you to take whateveryou need without rate increases. This is a very goodoption for some people.Solution #6: Long-term care insurance. This is thesolution that appeals to many people. It is an insurancepolicy designed to cover the expenses of long-term care,including home health care, assisted living and nursinghome charges. Planning is needed to determine the rightpackage to fit your unique position. Of course, insurabilitybecomes an issue, so you need an expert to assist in theplanning process.January 2011 : BulletinLong-term care insurance policy highlights1. Benefits are payable when the insured becomeschronically ill, satisfies the elimination period, and isreceiving qualified long-term care services pursuant toa written plan of care approved by the insurancecompany. Chronically ill would be defined as lackingthe ability to perform two or more activities of dailyliving without substantial assistance from anotherindividual. Activities of daily living are bathing,dressing, toileting, transferring, continence and eating.2. A severe cognitive mental impairment such asAlzheimer’s is covered when you are a hazard toyourself or others.3. The contract itself is guaranteed renewable, whichmeans the insurance company can’t cancel or changethe policy. Individual policy premiums cannot beincreased; however, a company may file with the StateInsurance Department requesting approval for aunified rate increase on all policyholders in thatparticular state.4. There are two types of LTC coverage.a. Reimbursement plan: Means that you accumulateyour bills, submit them to the insurance companyand receive reimbursement up to the eligible dailyor monthly benefit amount.b. Indemnity plan: Means that, once you qualify forbenefits, the insurance company will send you theeligible daily or monthly benefit and you payyour own bills. The indemnity plan is a littlemore expensive, but it is far easier to administer;plus the benefits will generally be higher, especiallyfor the home health care and assisted livingcoverage. I usually recommend this plan.5. How a claim is established: Once an insured qualifies,the attending physician certifies that the claimant isdisabled; a plan of care is developed by a home healthcare agency in conjunction with your attendingphysician and approved by the insurance company.The plan may be for home health care, assisted livingor nursing home services.Major benefit options• Coverage is available up to $400 a day.• There is always an elimination period, and it can beanywhere from 20 days to 365 days. Normally a 90- or100-day waiting period is used to keep the cost down,plus Medicare benefits may be available up to 100 days.continued on page 2927
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Page 20 and 21: 123We will help you withyour diagno
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Page 32 and 33: FEATURE (from page 31)Ralph Schmelt
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Page 40 and 41: ACMS BOARD OF DIRECTORSThe Alleghen
Page 42 and 43: CLASSIFIEDSFOR RENTMEDICAL OFFICE,
Page 44: Malachy Whalen & Co., Inc.Visit www

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