Baby Boomer Couples Cutting Health Care Costs

boomer couples cutting health care costs by poolingauthorities count the value of a private insurance policy
resources to reduce the cost of long term careto determine the amount of assets that are protected
premiums. Instead of buying for one, advisers andagainst pay-down requirements in Medicaid.
analysts say you can sometimes slash premium costsIt saves the states money because they're shifting
by approaching long term care insurance as a couple.costs of long-term care to insurance companies. And it
For those willing to shop around the following threeputs fewer burdens than we currently have on the
strategies are worth exploring:entire Medicaid system.
1.Shared care plansFor individuals, such partnerships can limit the size of
In general, sharing long-term policies doesn't eliminatepolicies they've got to buy. The trade-off is that if you
the need for both partners to buy separate plans. Butbuy less coverage than a state's threshold to qualify
unlike traditional policies, a special rider is tacked on tofor Medicaid, you'll still wind up dipping into your savings.
each to allow one spouse to dip into another's benefits."If you live in a dollar-for-dollar state, you might want to
The main advantage of shared coverage is that if youbuy enough insurance to protect your entire portfolio in
need more than your current plan allows. But whata partnership program," Gholson said.
happens if both eventually go over their allotted3. Ask insurance agents about discounts on bundled
amounts?purchases
If you've bought a contract with plenty of flexibility andThis could be the simplest way to savings.
terms that stretch over long periods, experts say thatSome carriers now offer promotional rates for two
won't necessarily be a problem. They point out thatpeople that buy a long term care package at the
some providers offer policies that can cover an entiresame time.
lifetime. A longer time frame usually means greaterThose are marketed as spousal discounts and can
premiums. A lifetime policy can translate into extrarange between 15% and 25% off regular premiums.
costs when compared with short-term plans coveringAnd if you qualify as extremely fit and healthy
three- to five-years of long-term care.candidates, some carriers will even add another 10%
"That can defeat the whole purpose of buying a policydiscount on top.
that allows you to share benefits," says Neil Gholson,Some things to consider:
President of LTC Finical Solutions, inc..Each of the three options presents different caveats.
To make sure you don't run out of benefits, Neil"People need to remember that the shared-care
suggests at least four years of coverage. Themarketplace is a fairly new phenomenon," said Cheryl
Consumers Union senior policy analyst says that'sMatheis, a health strategist at AARP. "They need to
based on data showing nursing-home use averagesask a lot of questions and carefully examine all of the
around 2.5 years in long-term policies.details in each policy."
"Very few people spend more than five years in a1. Check the insurers' history of changing prices and
nursing home," Gholson said. "So if you're going to getpolicy conditions. Only a few carriers haven't hiked
a long-term plan that shares care between spouses,premiums.
look at a four-year term. Fewer years could be a little2. Shared long term care benefits likely will cost you
shy, especially considering that policies can coverslightly more than traditional long-term-care policies of a
home as well as nursing home care."similar term.
Best suited for shared care policies might be couplesThe alternative is that if two people aren't sharing
that want to buy shorter-term plans but still want somelong-term-care insurance, they'll probably need to buy
flexibility to reach into their spouse's pool of benefits, hemore extensive individual policies to get the same level
added.of coverage. The big advantage to shared care is that
2. Long term care partnership dealsyou reduce the term of policies.
Two years ago, Congress expanded to most of the3. If you've got enough money, the best option is
country a program that had been running for years inalways to buy separate longer-term plans.
less than a handful of states. It allows the total value of4. If you're looking at a more affordable alternative,
long-term-care policies to be counted against Medicaidthen shared care is an option to at least consider.
requirements for drawing on personal assets to pay5. If you choose a state partnership programs need to
health bills.note any loopholes may exist, Gholson says. Even
But different states have different contingencies. Forbuying enough private care insurance to match asset
example, in New York consumers must purchase alevels isn't a guaranteed solution.
long-term-care policy that covers at least three years“Depending on where you live or move, the
in a nursing home and six years of home-based care.different Medicaid eligibility and income requirements in
In return, the state pledges not to go after anyeach state, the government might still be able to come
personal assets once someone exhausts the benefitsafter your assets in certain cases," Gholson said.
in their private policy, says Gholson.Spouses cutting health care costs can produce
"So Medicaid care becomes a free benefit withoutsignificant benefits with the right amount of research.
any strings attached," he added.Contact a Long Term Care Professional that
States such as California and Connecticut use what'srepresents several carriers to see what your options
termed dollar-for-dollar protection. In those cases,are.