Some people find it as a surprise that long term care is not covered by their health insurance to the extent they believed it did. Because of this individuals wanting to protect their assets and not force themselves into poverty to become Medicaid eligible, consider purchasing long term care coverage. In the last several years long term care insurers have made several changes and have brought new products to the market, such as state partnership policies in Indiana and other states. These policies allow the policy holder to keep some of their assets, even if they use all of their benefits and now need Medicaid. But what if you want to protect yourself but are on a budget that will not afford a typical Long Term Care policy?
Hybrid LTC Products
Fortunately the market is evolving and products with more flexibility and options are being developed leading to more moderate and lower priced policies. One such product I’ve started offering is called Recovery Care. Recovery Care allows us to customize a policy in a way to allow for budget as well as the anticipated need of the insured. Daily benefit amounts are available in increments of $10, for periods of 1 month to 1 year. Waiting periods are available in different lengths and there is a very affordable optional home health care benefit. Usually starting a just a couple extra dollars. This week a customer of mine that does not have a whole lot of assets to protect decided that this was the perfect product for him. He owns a home, truck and has about 30k in savings. He does not have a lot to spend down before qualifying for Medicaid. However, if he’s in a situation where he just needs care for a few months why would he want to sell down all his assets or risk spending a big portion of his assets on care, when for a few dollars a month he can protect those assets. He purchased a 90 day benefit for less than $25 a month.
The Right Choice For You?
In the end would you have possibly been better off in a 5 year LTC state partnership plan? Unfortunately you just won’t know until it’s too late. For some, a product like Recovery Care is just not going to be enough coverage. For many middle income Americans with whats left of their life savings at risk though, it’s an affordable solution that deserves a look. Way too few people are insured for LTC and if these products save some from Medicaid spend downs and maybe just delays it for others, I believe it’s a success. Larry Medcalf is a licensed insurance agent. His main focus is on serving the life, health, medicare and long-term care insurance needs of small businesses and middle-income families and individuals in Indiana, Ohio, Michigan, North Carolina and South Carolina.
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