Protect Your Assets With Long-Term Care Insurance

November 08, 2012

Protect Your Assets With Long-Term Care Insurance

The average cost of nursing-home care in the Houston area is more than $52,000 per year for a shared room, according to data from John Hancock's Cost of Care Study for 2011. A private room will set you back an average of nearly $73,000 a year.

If those figures seem daunting, consider the fact that the cost of long term care is expected to nearly triple in the next 20 years. With more and more Americans living to a ripe old age, the cost of elder care has gone through the roof. As a result, many retirees are left with no choice but to deplete their savings accounts and sell off other assets they had hoped to pass along to the next generation.

Include Long-Term Care in Your Retirement Plan

By incorporating long-term care insurance, or LTCI, into your retirement planning, you can prepare yourself for the possibility that you may someday need nursing home services, in-home assistance or some other form of long-term care. Unlike health insurance, which in most cases provides relatively short-term care, LTCI is designed to provide care over an extended period of time.

Many people make the mistake of assuming that long-term care will be covered by Medicaid without considering the fact that a person is generally ineligible for Medicaid unless his or her assets and income are very limited. This means that a person without LTCI will often have to exhaust his or her own personal assets before becoming eligible for Medicaid.

Medicaid Eligibility and LTCI in Texas

In Texas, a partnership between private insurers and the state allows some people to use their LTCI policy benefits to offset personal assets that would otherwise disqualify them from receiving Medicaid coverage.

Generally, under the Long-Term Care Partnership Program, each dollar that a person has in coverage under a partnership LTCI policy allows a dollar of his or her personal assets to be disregarded for purposes of determining Medicaid eligibility. In some cases, this may allow a person qualify for Medicaid without first having to deplete his or her personal assets.

Plan Ahead for Better Rates

It is often a good idea to purchase LTCI coverage early in the retirement planning process, since premiums tend to be much lower for people who sign up while still relatively young and in good health. To learn more about incorporating long-term care into your retirement plans, contact an experienced elder law attorney.

Article provided by Weiner & McCulloch, PLLC
Visit us at http://www.elderlawhousing.com