Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah
There is no need to "fix" long-term care insurance because it is not broken. However, our current system of how we as a society assist the growing number of elderly who may have no one to take care of them is in need of serious repair.
Right now, if one cannot afford the cost of long-term care, they must become "indigent", that is to say, have less that about $2,000 in liquid assets and make less than $35/mo. (those numbers are adjusted annually and may not be accurate). Assets excluded from the equation are one's house, one's car, and approximately $91,000 in savings or checking for spousal support. If you have more than that you have to "spend down" in order to qualify for government assistance (Medicaid - in CA, Medical). The problem is that those programs are not well-funded and may not have sufficient funds when the current baby-boomer demographic hits the age when many will need expensive long-term care.
The private sector provides a solution to this problem in selling long-term care insurance to the general public. However, while highly valuable, it is also highly priced. In fact, the middle class, for which it was originally designed to help, have been priced out of the market. Agents are challenged to come up with coverage that middle class folk can afford.
The state and federal government's solution is Medicaid. However, without reform, Medicaid - a partnership between the federal government and the states - will likely run out of money within the next 10-15 years. No one wants that to happen, but no one is doing anything about it right now. A congressional commission has been meeting since the beginning of summer 2013 on the matter of long-term care and should be coming out soon with recommendations for confronting the problem of how we help our elderly die with dignity.
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Right now, if one cannot afford the cost of long-term care, they must become "indigent", that is to say, have less that about $2,000 in liquid assets and make less than $35/mo. (those numbers are adjusted annually and may not be accurate). Assets excluded from the equation are one's house, one's car, and approximately $91,000 in savings or checking for spousal support. If you have more than that you have to "spend down" in order to qualify for government assistance (Medicaid - in CA, Medical). The problem is that those programs are not well-funded and may not have sufficient funds when the current baby-boomer demographic hits the age when many will need expensive long-term care.
The private sector provides a solution to this problem in selling long-term care insurance to the general public. However, while highly valuable, it is also highly priced. In fact, the middle class, for which it was originally designed to help, have been priced out of the market. Agents are challenged to come up with coverage that middle class folk can afford.
The state and federal government's solution is Medicaid. However, without reform, Medicaid - a partnership between the federal government and the states - will likely run out of money within the next 10-15 years. No one wants that to happen, but no one is doing anything about it right now. A congressional commission has been meeting since the beginning of summer 2013 on the matter of long-term care and should be coming out soon with recommendations for confronting the problem of how we help our elderly die with dignity.