Planning Ahead

by Deborah Miller, J.D.

Senior Director of Planned Giving

West Virginia University Foundation

Without a crystal ball, it’s hard to predict whether a person will need nursing home care for short or long periods of time. Because of the high costs involved, many people look for a way to handle such possible expenses as they set up their other estate plans.

There is a special type of insurance coverage ­– long-term care insurance ­ which pays for nursing home costs, in-home services, respite care and related expenses.

Medicare and Medigap policies will not cover nursing home or in-home care needs beyond certain amounts. Medicaid can, but only for individuals who own less than a certain amount of property or assets.

Today, approximately 70 percent of those age 65 and over will need some long-term care at home or in a medical facility. More than half of those going into a nursing home will be there less than 90 days, but for those who remain longer, their average stay will exceed two and a half years.

Many are concerned that if their funds are needed to pay these expenses, the inheritance they had hoped to provide for others will be reduced or eliminated.

A free booklet, “A Shopper’s Guide to Long-Term Care Insurance,” can help you assess whether long-term care coverage is appropriate for your situation and what to look for in such a policy.  Call the West Virginia Bureau of Senior Services in Charleston at 304-558-3317 for a copy from a Medicare counselor. Another comprehensive source of information is www.longtermcare.gov.

Terms of the policy should be reviewed carefully. Policies do not cover nursing home care unless the insured is sick, injured or unable to perform certain daily activities independently.

Daily rates for covered expenses vary and inflation should be factored in. Selecting both nursing home and in-home services is generally a smart choice. Also, how long you must pay for the expenses yourself before coverage begins and the length of time the policy will pay benefits are important considerations.

Generally, the younger and the healthier the insured person is, the lower the premiums will be.

Some companies offer a policy to cover a married couple and provide a discount on the premiums.

To establish coverage, a medical exam is generally required. Previous medical conditions and family medical history can affect whether coverage is available. Many wait until health problems begin and find they cannot secure long-term care coverage any longer or the cost is much higher than it would have been earlier.

There is also a return of premium rider that can refund the premiums on a regular basis if care is not actually needed.

Finding the right balance between setting aside reserves for special needs and securing insurance to cover extraordinary needs is important. Such a balance helps preserve both current financial security and future benefits for family and others.

That’s good planning.