April 6, 2011 – Take a moment and ask: How will the need for long-term care affect your life? Do you plan to care for your parents as they get older? Will you need your children to care for you when you can no longer bathe and dress yourself? We seldom think of ourselves in these situations, but we should. After age 65 each of us has a one-in-two chance of needing some form of long-term care. You might receive care at home, in an assisted-living facility, or even in a nursing home. Who will pay for your long-term care? Medicare will not.

Long-term care is expensive

Do you know the rules for Medicare and Medicaid? Each of us may be entitled to 100 days of Medicare; however, in Wisconsin, people are receiving on average only 13.5 days of Medicare benefits. How much can long-term care cost? A recent survey by MetLife points to the cost of care for a private room rising by 4.6 percent annually. The services of home-health aides currently cost, on average, $21 an hour. Assisted-living facilities cost $40,000 and more annually, and the average private room in a nursing home costs about $84,000 a year. Medicaid and Medicare typically do not pay for any home health care or assisted-living facilities. Long-term care insurance (LTCI) will cover the cost of home-health care, adult day-care, and care provided in assisted-living facilities and nursing homes.

To receive the benefit from an LTCI policy, you need to require assistance with two activities of daily living, which are bathing, dressing, eating, transferring, toileting, and continence, or have a cognitive impairment. These activities are considered custodial care activities. Many of us take for granted that we will always be able to do everything for ourselves.

Buy long-term care insurance now

The LTCI market is very dynamic. Companies introduce new LTCI products every two years and raise the rates for new purchasers. Waiting to buy an LTCI policy will probably cost you a significant amount because premiums increase as you get older.

Bultman Financial Services (BFS) is the endorsed agent for the State Bar of Wisconsin group long-term care insurance, offered through the State Bar’s member benefits program. Sponsored-group discounts on LTCI are offered through:

• John Hancock

• United of Omaha

• MassMutual

• Prudential

It is important to review coverage with more than one company, because no two LTCI policies are exactly alike. All LTCI companies offer slightly different benefits. For example, some companies offer a “shared care” rider, which allows couples to share each other’s coverage. It is important to work with an expert who can point out all of the nuances of different LTCI policies.

If you are taxed as a self-employed professional, you may be able to obtain a federal income tax deduction for some or all of the LTCI premiums you pay for yourself and your spouse.

Long-term care insurance provides a good value; the rate of return on your investment may be huge. The time to buy LTCI is when you are young (40s, 50s, and 60s) and healthy – when premiums are less costly. While LTCI can be obtained up to age 84, it is harder to get and more expensive. As a result of recent income tax law changes, there are new LTCI combination policies that may be more appropriate for applicants in their 70s and 80s.

To receive a cost-free quote for long-term care insurance, please visit Bultman Financial Services’ website, www.bultmanfinancial.com. If you have questions about your particular situation, please contact Mary Kay Bultman, mbultman@bultmanfinancial.com.

About the author

Mary Kay Bultman, R.N. MS, MBA, CLTC, is chief executive officer and president of Bultman Financial Services Inc.

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