01

Cost of Care in Texas

          Knowing how much long term care services would cost in the future is necessary in preparing your retirement plan. View the average cost of care of services in your area below. It’s important to understand that these costs are projected to continue to increase annually.  

         Source: Genworth Cost of Care Survey

 

 

02

Why Should I not self insure for Long Term Care?

         

          Often people think that they can simply save for their own future ltc needs. They believe that maybe I won’t need it, and if I save then I’ve come out ahead by having more for my retirement. Though this sounds good in principle it doesn’t work in practical purpose. Let’s look at why. The first and foremost reason is you would have to invest far more than the amount you would pay in a ltc premium just to get the same amount of protection which is needed and provided by a ltc policy. Secondly, you would never be able to enjoy or spend that money freely since it would always have to be kept in reserve not knowing if and when you may require ltc. Another reason is one would have to consistently put away money every month, and get a consistent high return on that money to just get enough for 1 year of coverage much less the average 3.1 years which a ltc recipient uses. Lastly, you would have to ensure you never needed coverage until well into your golden years . Remember, 40% of ltc users are under 65 years of age. If this happens to you then these numbers and this plan simply won’t work.

 

          Let us look at an example and see the numbers involved: Below is a 52 year old with an average rate of return of 6%. Here we show how much money is saved by self-insuring and what is required to properly insure.

 

                                                

                                     Hypothetical Annual Premium of $1,465.00(1).

                         Premium Savings at 6%                              Annual Cost of Care

                             31% Tax Bracket                  AGE                      5% inflation

                                    $1,721.00                        52                        $51,100.00

                                    $3,513.25                        53                        $53,655.00

                                    $5,379.70                        54                        $56,337.75

                                    $7,323.42                        55                        $59,154.64

                                    $9,347.61                        56                        $62,112.37

                                    $11,455.60                      57                        $65,217.99

                                    $13,650.86                      58                        $68,478.89

                                    $15,937.01                      59                        $71,902.83

                                    $18,317.80                      60                        $75,497.97

                                    $20,797.15                      61                        $79,272.87

                                    $23,379.16                      62                        $83,236.52

                                    $26,068.05                      63                        $87,398.34

                                    $28,868.27                      64                        $91,768.26

                                    $31,784.42                      65                        $96,356.67

                                    $34,821.29                      66                        $101,174.50

                                    $37,983.89                      67                        $106,233.23

                                    $41,277.43                      68                        $111,544.89

                                    $44,707.31                      69                        $117,122.14

                                    $48,279.19                      70                        $122,978.24

                                    $51,998.95                      71                        $129,127.15

                                    $55,872.71                      72                        $135,583.51

                                    $59,906.84                      73                        $142,362.69

                                    $64,107.98                      74                        $149,480.82

                                    $68,483.05                      75                        $156,954.86

                                    $73,039.25                      76                        $164,802.61

                                    $77,784.08                      77                        $173,042.74

                                    $82,725.34                      78                        $181,694.87

                                    $87,871.17                      79                        $190,779.62

                                    $93,230.03                      80                        $200,318.60

 

          After 28 years of saving, you have accumulated approximately enough money to pay for only 6 months of care.

 

          If you were faced with the average 3.1 Year Long Term Care stay(2), even under the optimal saving conditions shown above, you would have ($527,757.62) of exposure.

Every year in addition to the average 3.1 Year Stay will cost you an additional $200,318.60/Per Year

 

 

03

What is the disadvantage of waiting to buy a Long Term policy?

         

          Some people believe that they will save money by waiting until they need it, and then purchasing a ltc policy. Nothing could be further from the truth. The first reason why is HEALTH. Health is a big factor in determining whether you are eligible, and the rate to your premium. If you are healthy now you will get the best rate. If you wait you roll the dice that this may change. You may end up not ever being able to get ltc insurance, and/or you may end up getting highly rated up defeating the initial purpose to save money. The second reason is the longer you wait the higher the premium. As you can see in the below chart waiting will end up costing you more money in the long run. To calculate let us use the same example of a 52 year old waiting 5 years to purchase their ltc policy.

 

        

Age                Daily                  Projected Premium if                   Projected Premium to

                     Benefit                      Bought Today*                          Wait Until Age 57*

52                 $140.00                        $1,721.00                                   Uninsured

53                 $147.00                        $1,721.00                                   Uninsured

54                 $154.35                        $1,721.00                                   Uninsured

55                 $162.07                        $1,721.00                                   Uninsured

56                 $170.17                        $1,721.00                                   Uninsured

57                 $178.68                        $1,721.00                                    $2,716.00

58                 $187.61                        $1,721.00                                    $2,716.00

59                 $196.99                        $1,721.00                                    $2,716.00

60                 $206.84                        $1,721.00                                    $2,716.00

61                 $217.19                        $1,721.00                                    $2,716.00

62                 $228.05                        $1,721.00                                    $2,716.00

63                 $239.45                        $1,721.00                                    $2,716.00

64                 $251.42                        $1,721.00                                    $2,716.00

65                 $263.99                        $1,721.00                                    $2,716.00

66                 $277.19                        $1,721.00                                    $2,716.00

67                 $291.05                        $1,721.00                                    $2,716.00

68                 $305.60                        $1,721.00                                    $2,716.00

69                 $320.88                        $1,721.00                                    $2,716.00

70                 $336.93                        $1,721.00                                    $2,716.00

71                 $353.77                        $1,721.00                                    $2,716.00

72                 $371.46                        $1,721.00                                    $2,716.00

73                 $390.03                        $1,721.00                                    $2,716.00

74                 $409.54                        $1,721.00                                    $2,716.00

75                 $430.01                        $1,721.00                                    $2,716.00

76                 $451.51                        $1,721.00                                    $2,716.00

77                 $474.09                        $1,721.00                                    $2,716.00

78                 $497.79                        $1,721.00                                    $2,716.00

79                 $522.68                        $1,721.00                                    $2,716.00

80                 $548.82                        $1,721.00                                    $2,716.00

81                 $576.26                        $1,721.00                                    $2,716.00

82                 $605.07                        $1,721.00                                    $2,716.00

83                 $635.33                        $1,721.00                                    $2,716.00

84                 $667.09                        $1,721.00                                    $2,716.00

85                 $700.45                        $1,721.00                                    $2,716.00

Total Premium                               $58,514.00                                  $78,764.00

 

 

          If you wait until age 57, it will cost you an additional $20,250.00 in Premium. Even if you saved the first 5 years of premiums at 6% interest and a 28% Tax Bracket, it would still cost you an additional $9,876.18 and you were
uninsured for 5 years.

 

          Most Importantly, if an unexpected Health condition arises, you might not be able to qualify for the protection if you wait.

 

          *Hypothetical premium based on 100% Home Health, Unlimited Benefit Period,
Compound Inflation Rider and 90 Day Elimination Period with Spousal & Preferred Discounts. Policies vary, consult your agent about specific plan design and premiums for your individual situation.

 

 

 

04

Who is paying for Long Term Care insurance here in America?
 

         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

          Medicaid being the largest part of this pie chart let’s look at what it does. Medicaid is for the indigent. Medicaid normally only pays for nursing home care. This leaves the more popular and nicer choices of Assisted Living and Home care unavailable. It also requires you to be indigent which defeats the very purpose of what ltc care is doing for you. Ensuring your estates’ assets and ensuring you a quality state of living in your golden years.

 

The Individual. Families now pay for nearly 1/3rd of all ltc costs. Again, this is what we are trying to avoid being a burden on your family, and protecting your estate from ruination.

 

Medicare. This covers some skilled care, but not custodial care which accounts
for 95% of ltc needs. It simply isn’t an option, and the government is greatly
curtailing what it will cover in the ltc field.

 

Medical Insurance. Medical insurance covers doctors, surgeries,
hospitalization, drugs, vision, etc. not ltc. It’s intention is to restore you
to health, and is a very short term solution to the ltc problem. It is simply
not intended or built to handle ltc problems.

 

Other. This category includes long-term care insurance, retiree medical
benefits, workers’ compensation, charitable donations, and other insurance
benefits.

 
 

05

How does Medicare factor into the ltc equation?

 

Qualifying for Medicare

          Medicare is a national health insurance program for people 65 years of age and older, certain younger disabled people and people with permanent kidney failure.Like your regular health insurance, it is not intended to provide long- term custodial care!

 

What is the criteria?

 

- Must have a hospital stay of three consecutive days. (not counting the day of discharge.)

- Be admitted to a nursing facility for the same illness for which you.

- Were hospitalized within 30 days of discharge.

- Be receiving skilled care only.

- Be certified by a medical professional that you need skilled nursing or rehabilitative   services daily.

 

How much does Medicare pay?

- 100% of the first 20 days. (providing you are receiving daily skilledcare.)

- Days 21-100, you pay the first $105 per day and Medicare will pay the balance.

- After day 100, Medicare pays nothing.

 

How much does Medicare pay for Home Health care?

Home Care Visits must require skilled care or rehabilitative care only, i.e. patient must get better.Will pay for Visits Only (Average visit is 1-2 hours)

 

Care Percentage Breakdown

Skilled                   5%

Intermediate       4.5%

Custodial             95%

 

          *The Percentage breakdown above shows that most care provided is custodial and not covered by Medicare.

 

 
How does Medicaid factor into the Long Term Care equation?

 

 

          Medicaid is designed to provide long-term care in a nursing facility only. Assisted Living Facilities and Custodial Home Health Care services are not covered under Medicaid. This severely limits your care options. Relying on Medicaid means giving up your independence and choice of who provides your care and where those services are provided. In addition, the government has recently put rigorous penalties, and laws on anyone trying to transfer assets for the express purpose of showing indigency to get long term care under Medicaid. The government has made it very clear that the burden of long term care expenses must and will fall upon the shoulders of the American people. You simply cannot expect or should rely upon government assistance to ensure that your care will be taken care of by the government in your golden years.

 

06

What Benefits are afforded me through a Long Term Care policy?

 

 

          The (MDB) or maximum daily benefit is the amount paid per day when you cannot do 2 or the 6 (ADL)’s or activities of daily living, or have a cognitive impairment. This payment can be for services paid to a Nursing home, Assisted Living, Home Health Care, Adult Day Care, Hospice, or Respite Care.

 

          Benefits are paid by two methods. The first is the expense incurred method. Benefits are paid either to your or your provider, and are paid directly to you or your provider as they are incurred. They pay for the lesser of the expense or the dollar limit of your policy. Most policies today use the expense incurred method.

 

          The second method is the indemnity method. The insurance company will pay a set amount directly to you up to the limit of the policy for benefits you receive that are covered by the policy.

 

          Policies normally pay benefits by the day, week, or month. This is where you sit down with me and we find what level is both suitable to your budget, and your needs. Most policies will limit the amount of coverage they will pay over the lifetime of the policy. Some policies will do this by limiting the number of years the policy will pay, or do this by limiting the “pool” of money that is available to pull from. These maximum benefit limits may be called a “total lifetime benefit”, a “maximum lifetime benefit” or a “total plan benefit.”

 

07

 
What kind of Co-Insurance amount should I consider?

 

 

          The first issue we look at is the amount of time that the policy will pay for. I usually recommend at least a 3 year policy given the fact that the average length of coverage needed is 3.1 years. You may wish to extend this coverage to 4, 5, or even unlimited if genetic factors within your family such as alzheimer’s etc. may be present. These are usually discussed face to face and can vary from person to person. The next area is per day coverage. The usual is the present day average cost of ltc in Texas which is close to $150/day. Again this can change given a person’s finances, or the level of care they desire.

 

          This can be done with a fully paid policy or one which will cover only a portion of the care depending upon your financial condition and needs.

 

          For example, if the cost in your area is currently $160.00 per day, you could buy a policy that pays $130.00 per day. The policy would cover up to $3,900.00 per month and you would co-insure the difference, which would cost you $30 per day or $900 per month. When you use the co-insure method, you can reduce your long-term care insurance premiums. We will use a 50 year old for example.

 

           Assume the average cost of care in your area is $160/day for a long-term care need. If you want to co-insure $30/day of that cost, you could buy a $130/day LTCI policy. If you need care at age 75 (25 years from now), what will your monthly out-of-pocket expenses be, given a 5% inflation assumption?
On the chart below, you can look for the daily self-insuring amount (in the example we are using $30/day) at the top and scroll down to 25 years from now.
The chart will show the monthly out-of-pocket expenses that you will incur are $3,047.72.

 

Daily Amount to Co-Insure

 

                    $60.00         $50.00         $40.00         $30.00         $20.00         $10.00         $5.00

 

Age                            Amounts Below Reflect Monthly Out-of-Pocket Costs                              Inflation

 

50               $1,800.00     $1,500.00    $1,200.00      $900.00       $600.00       $300.00     $150.00             5%

51               $1,890.00     $1,575.00    $1,260.00      $945.00       $630.00       $315.00     $157.50             5%

52               $1,984.50     $1,653.75    $1,323.00      $992.25       $661.50       $330.75     $165.38             5%

53               $2,083.73     $1,736.44    $1,389.15   $1,041.86       $694.58       $347.29     $173.64             5%

54               $2,187.91     $1,823.26    $1,458.61   $1,093.96       $729.30       $364.65     $182.33             5%

55               $2,297.31     $1,914.42    $1,531.54   $1,148.65       $765.77       $382.88     $191.44             5%

56               $2,412.17     $2,010.14    $1,608.11   $1,206.09       $804.06       $402.03     $201.01             5%

57               $2,532.78     $2,110.65    $1,688.52   $1,266.39       $844.26       $422.13     $211.07             5%

58               $2,659.42     $2,216.18    $1,772.95   $1,329.71       $886.47       $443.24     $221.62             5%

59               $2,792.39     $2,326.99    $1,861.59   $1,396.20       $930.80       $465.40     $232.70             5%

60               $2,932.01     $2,443.34    $1,954.67   $1,466.01       $977.34       $488.67     $244.33             5%

61               $3,078.61     $2,565.51    $2,052.41   $1,539.31    $1,026.20       $513.10     $256.55             5%

62               $3,232.54     $2,693.78    $2,155.03   $1,616.27    $1,077.51       $538.76     $269.38             5%

63               $3,394.17     $2,828.47    $2,262.78   $1,697.08    $1,131.39       $565.69     $282.85             5%

64               $3,563.88     $2,969.90    $2,375.92   $1,781.94    $1,187.96       $593.98     $296.99             5%

65               $3,742.07     $3,118.39    $2,494.71   $1,871.04    $1,247.36       $623.68     $311.84             5%

66               $3,929.17     $3,274.31    $2,619.45   $1,964.59    $1,309.72       $654.86     $327.43             5%

67               $4,125.63     $3,438.03    $2,750.42   $2,062.82    $1,375.21       $687.61     $343.80             5%

68               $4,331.91     $3,609.93    $2,887.94   $2,165.96    $1,443.97       $721.99     $360.99             5%

69               $4,548.51     $3,790.43    $3,032.34   $2,274.26    $1,516.17       $758.09     $379.09             5%

70               $4,775.94     $3,979.95    $3,183.96   $2,387.97    $1,591.98       $795.99     $397.99             5%

71               $5,014.73     $4,178.94    $3,343.16   $2,507.37    $1,671.58       $835.79     $417.89             5%

72               $5,265.47     $4,387.89    $3,510.31   $2,632.73    $1,755.16       $877.58     $438.79             5%

73               $5,528.74     $4,607.29    $3,685.83   $2,764.37    $1,842.91       $921.46     $460.73             5%

74               $5,805.18     $4,837.65    $3,870.12   $2,902.59    $1,935.06       $967.53     $483.76             5%

75               $6,095.44     $5,079.53    $4,063.63   $3,047.72    $2,031.81    $1,015.91     $507.95             5%

76               $6,400.21     $5,333.51    $4,266.81   $3,200.11    $2,133.40    $1,066.70     $533.35             5%

77               $6,720.22     $5,600.18    $4,480.15   $3,360.11    $2,240.07    $1,120.04     $560.02             5%

78               $7,056.23     $5,880.19    $4,704.15   $3,528.12    $2,352.08    $1,176.04     $588.02             5%

79               $7,409.04     $6,174.20    $4,939.36   $3,704.52    $2,469.68    $1,234.84     $617.42             5%

80               $7,779.50     $6,482.91    $5,186.33   $3,889.75    $2,593.17    $1,296.58     $648.29             5%

08

 
 

09

How will this policy keep up with inflation?

 

 

          There are three approaches for having your policy keep up with the ravages of inflation. The first is:

 

          (GPO) This is called a guaranteed purchase option. This is a periodic offer increase of the Daily Benefit by a percentage based on the Consumer Price Index. How often you have to increase your coverage varies from company to company but is usually every three years. Normally, if you decline a certain number of increases, the rider will no longer be offered. Note: With the GPO, all benefit increases will be purchased at your age when the offer is extended. The Guaranteed Purchase Offer is not available in all states. In addition, the Texas partnership provisions will not be applicable to the policy if this type of protection is chosen.

 

          The Simple Benefit Increase Rider provides an automatic increase in your Daily Benefit on each policy anniversary. The increase will be 5% of the original Daily Benefit. For example, if you had a $140 Daily Benefit, your benefit would increase by $7.00 each year. So, on your 1st policy anniversary, the benefit would increase to $147.00 per day. On the 2nd anniversary, it would increase to $154.00 per day. With the Simple Benefit Increase Rider, your Daily Benefit would double in 20 years. Note: The Simple Benefit Increase Rider is not available in all states.

 

          The Compound Benefit Increase Rider provides for an automatic increase of the Daily Benefit on each policy anniversary of an amount equal to 5% of the previous year’s Daily Benefit. For example, if you had a $140 Daily Benefit, on your 1st policy anniversary, your benefit would increase to $147.00 per day. On the 2nd anniversary it would increase 5% of $147.00, which would be $154.35 per day. The benefit would continue compounding over the life of the policy. With the Compound Benefit Increase Rider, your Daily Benefit would double in 15 years. The next page will show how inflation impacts your daily benefit.

The last two inflationary provisions will allow your policy to be applicable to the Texas partnership provisions.

 

            Most polices have an inflationary rider. This builds the value of the policy, and keeps it current with the current costs of long term care. In addition, current Texas partnership programs require that an inflationary rider be a part of your ltc policy for their provisions to be applicable to you.

 

            Again these policies are tailor made around your needs. There are no one size fits all policies. I sit down with you, analyze your needs, and we build this policy to your financial situation to fit your future needs. Ultimately, we have a policy that fits your budget, gives you peace of mind, and the protection now and into the future that will ensure the preservation of your estate, dignity, and quality of care.

 

                      $130/Day                                $140/Day                              $150/Day

 

Age      None      Simple     Compound         None      Simple    Compound        None     Simple     Compound

 

50    $130.00  $130.00  $130.00     $140.00  $140.00  $140.00    $150.00  $150.00  $150.00

51    $130.00  $136.50  $136.50     $140.00  $147.00  $147.00    $150.00  $157.50  $157.50

52    $130.00  $143.00  $143.33     $140.00  $154.00  $154.35    $150.00  $165.00  $165.38

53    $130.00  $149.50  $150.49     $140.00  $161.00  $162.07    $150.00  $172.50  $173.64

54    $130.00  $156.00  $158.02     $140.00  $168.00  $170.17    $150.00  $180.00  $182.33

55    $130.00  $162.50  $165.92     $140.00  $175.00  $178.68    $150.00  $187.50  $191.44

56    $130.00  $169.00  $174.21     $140.00  $182.00  $187.61    $150.00  $195.00  $201.01

57    $130.00  $175.50  $182.92     $140.00  $189.00  $196.99    $150.00  $202.50  $211.07

58    $130.00  $182.00  $192.07     $140.00  $196.00  $206.84    $150.00  $210.00  $221.62

59    $130.00  $188.50  $201.67     $140.00  $203.00  $217.19    $150.00  $217.50  $232.70

60    $130.00  $195.00  $211.76     $140.00  $210.00  $228.05    $150.00  $225.00  $244.33

61    $130.00  $201.50  $222.34     $140.00  $217.00  $239.45    $150.00  $232.50  $256.55

62    $130.00  $208.00  $233.46     $140.00  $224.00  $251.42    $150.00  $240.00  $269.38

63    $130.00  $214.50  $245.13     $140.00  $231.00  $263.99    $150.00  $247.50  $282.85

64    $130.00  $221.00  $257.39     $140.00  $238.00  $277.19    $150.00  $255.00  $296.99

65    $130.00  $227.50  $270.26     $140.00  $245.00  $291.05    $150.00  $262.50  $311.84

66    $130.00  $234.00  $283.77     $140.00  $252.00  $305.60    $150.00  $270.00  $327.43

67    $130.00  $240.50  $297.96     $140.00  $259.00  $320.88    $150.00  $277.50  $343.80

68    $130.00  $247.00  $312.86     $140.00  $266.00  $336.93    $150.00  $285.00  $360.99

69    $130.00  $253.50  $328.50     $140.00  $273.00  $353.77    $150.00  $292.50  $379.04

70    $130.00  $260.00  $344.93     $140.00  $280.00  $371.46    $150.00  $300.00  $397.99

71    $130.00  $266.50  $362.18     $140.00  $287.00  $390.03    $150.00  $307.50  $417.89

72    $130.00  $273.00  $380.28     $140.00  $294.00  $409.54    $150.00  $315.00  $438.79

73    $130.00  $279.50  $399.30     $140.00  $301.00  $430.01    $150.00  $322.50  $460.73

74    $130.00  $286.00  $419.26     $140.00  $308.00  $451.51    $150.00  $330.00  $483.76

75    $130.00  $292.50  $440.23     $140.00  $315.00  $474.09    $150.00  $337.50  $507.95

76    $130.00  $299.00  $462.24     $140.00  $322.00  $497.79    $150.00  $345.00  $533.35

77    $130.00  $305.50  $485.35     $140.00  $329.00  $522.68    $150.00  $352.50  $560.02

78    $130.00  $312.00  $509.62     $140.00  $336.00  $548.82    $150.00  $360.00  $588.02

79    $130.00  $318.50  $535.10     $140.00  $343.00  $576.26    $150.00  $367.50  $617.42

80    $130.00  $325.00  $561.85     $140.00  $350.00  $605.07    $150.00  $375.00  $648.29

10

What is the cost of the deductible or otherwise known as the Elimination period?

 

          The Elimination period works just like your deductible on your car insurance. Instead of a dollar amount you are required to pay a set number of days. (usually 90) You can choose 0,30,60,90, or 180. You need to select an elimination period with which you are financially comfortable, keeping in mind that the cost of care will most likely continue to rise with inflation. To view how inflation impacts the elimination period, view the chart below below.

 

The chart below is based on a 50 yr old with $140 per day benefit factoring in 5% compound inflation.

 

 

Age               180 Days               90 Days              60 Days              30 Days               0 Day

 

Amounts Below Show What You Have to Pay Before Benefits Start

 

50                $25,200.00            $12,600.00           $8,400.00            $4,200.00              $0.00

51                $26,460.00            $13,230.00           $8,820.00            $4,410.00              $0.00

52                $27,783.00            $13,891.50           $9,261.00            $4,630.50              $0.00

53                $29,172.15            $14,586.08           $9,724.05            $4,862.03              $0.00

54                $30,630.76            $15,315.38           $10,210.25          $5,105.13              $0.00

55                $32,162.30            $16,081.15           $10,720.77          $5,360.38              $0.00

56                $33,770.41            $16,885.21           $11,256.80          $5,628.40              $0.00

57                $35,458.93            $17,729.47           $11,819.64          $5,909.82              $0.00

58                $37,231.88            $18,615.94           $12,410.63          $6,205.31              $0.00

59                $39,093.47            $19,546.74           $13,031.16          $6,515.58              $0.00

60                $41,048.14            $20,524.07           $13,682.71          $6,841.36              $0.00

61                $43,100.55            $21,550.28           $14,366.85          $7,183.43              $0.00

62                $45,255.58            $22,627.79           $15,085.19          $7,542.60              $0.00

63                $47,518.36            $23,759.18           $15,839.45          $7,919.73              $0.00

64                $49,894.28            $24,947.14           $16,631.43          $8,315.71              $0.00

65                $52,388.99            $26,194.50           $17,463.00          $8,731.50              $0.00

66                $55,008.44            $27,504.22           $18,336.15          $9,168.07              $0.00

67                $57,758.86            $28,879.43           $19,252.95          $9,626.48              $0.00

68                $60,646.80            $30,323.40           $20,215.60          $10,107.80            $0.00

69                $63,679.14            $31,839.57           $21,226.38          $10,613.19            $0.00

70                $66,863.10            $33,431.55           $22,287.70          $11,143.85            $0.00

71                $70,206.26            $35,103.13           $23,402.09          $11,701.04            $0.00

72                $73,716.57            $36,858.29           $24,572.19          $12,286.10            $0.00

73                $77,402.40            $38,701.20           $25,800.80          $12,900.40            $0.00

74                $81,272.52            $40,636.26           $27,090.84          $13,545.42            $0.00

75                $85,336.14            $42,668.07           $28,445.38          $14,222.69            $0.00

76                $89,602.95            $44,801.48           $29,867.65          $14,933.83            $0.00

77                $94,083.10            $47,041.55           $31,361.03          $15,680.52            $0.00

78                $98,787.25            $49,393.63           $32,929.08          $16,464.54            $0.00

79                $103,726.62          $51,863.31           $34,575.54          $17,287.77            $0.00

80                $108,912.95          $54,456.47           $36,304.32          $18,152.16            $0.00
 

 
 
What is the Texas Partnership Program?

 

 

           In 2005 when President Bush signed the Deficit Reduction Act the federal government was telling you that long term care was your financial responsibility. The Act made it more difficult to qualify for Medicaid paid long-term care. It also lifted the federal ban on the expansion of the Partnership Program— a public/private “partnership” between states and private insurance companies designed to help stabilize state’s Medicaid programs by making quality long-term care insurance more affordable and useful to middle income citizens.

 

How does this protect my assets?

 

           A Partnership policy has a unique feature called Medicaid Asset Protection. It guarantees that you keep a dollar’s worth of assets for every dollar your Partnership policy pays out in long-term care benefits. Thus if you purchased a policy that paid out $300,000 worth of long term care benefits and was exhausted you would be able to still qualify for long term care benefits under Medicaid while still keeping $300,000 worth of assets in your estate. What distinguishes a partnership policy from a non-partnership policy is the mandatory age appropriate inflation protection. Partnership policies must at issue provide inflation protection as follows:

 

- 60 and younger: automatic compound inflation 
- 61–75: automatic compound or simple inflation 
- 76 and older: inflation protection is discretionary

 

          The Guaranteed Purchase Option inflation benefit offered by many carriers, also referred to as GPO, does not qualify as a inflation option under Partnership.

 

          The Long Term Care companies that I represent have all qualified for the Texas Partnership Agreement.

 

 

11

What kind of tax deductions are allowed for Long Term Care policies?

 

 

           Tax-qualified LTCi premiums are considered a medical expense. For an individual who itemizes tax deductions, medical expenses are deductible to the extent that they exceed current amount required to meet the individual's Adjusted Gross Income (AGI). The amount of the LTCi premium treated as a medical expense is limited to the eligible LTCi premiums, as defined by Internal Revenue Code 213(d), based on the age of the insured individual. That portion of the LTCi premium that exceeds the eligible LTCi premium is not included as a medical expense.

 

          Individual taxpayers can treat premiums paid for tax-qualified long-term care insurance for themselves, their spouse or any tax dependents (such as parents) as a personal medical expense.

 

          The yearly maximum deductible amount for each individual depends on the insured's attained age at the close of the taxable year (see Table 1 for current limits). These deductible maximums are indexed and increase each year for inflation.

 

 

12

 
How the process takes place?

 

 

          I listen to your concerns and answer your questions.

 

          I analyze the available companies like John Hancock, Life Secure, Prudential, and others, to find the company that has the best value for you.

 

          I consult you through the nuances of Long Term Care Insurance. You learn what determines your rates, how to implement your policy if you need care, and other pertinent information. I make sure your questions are answered, and that you are completely comfortable with the process.

 

          Having selected the company that has the best value for you, we ensure it has the financial stability that you are comfortable with. We compare different pricing and feature option and tailor make a policy that fits into your budget.

 

          We then complete a simple application process which contains all the pertinent information the insurance company needs to process your policy.

 

          Submitting an application does not mean you will be accepted, or are obligated in any way. It simply starts the underwriting process on whether you will be accepted or not. You will still be able to change your mind, alter the features or benefits on your policy.

 

          Necessary information includes: Your doctors’ names, addresses, and phone number, and the names and doses of any medications you take. Most applications require a deposit of at least 1 month premium, although premiums are 100% refundable if your application is declined, or if you change your mind.

 

          Then someone from the insurance company will call you for a mandatory phone interview, which takes about 15 minutes. This takes place at a time that is convenient for you.

 

          Some applications can take up to two months before we know whether your application has been accepted. This is usually due to the fact that medical records must be obtained.

 

          Once your policy is issued it can be delivered by mail directly or in person by me personally to review it with you. At this time you have 30 days to review and accept the policy after that you can cancel the policy at any time by letting it lapse.This relationship lasts for a lifetime.

 

13

 
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Long Term Care San Antonio, Austin, Dallas, Texas