Long-term Care...What is it?
Long-term care is defined as assistance in living, provided to an individual who has difficulty in taking care of himself or herself over an extended period of time. The care can be in one's home, a rehabilitative setting, a convalescent or nursing home, a personal care facility, or an adult day-care center. The probability of requiring such care at some point in our lifetime increases as we get older.

Until recently, few people understood that Medicare and other forms of health insurance DO NOT pay for custodial care at home or in a nursing home facility. With all the media exposure concerning the costs of catastrophic illness, more and more people have begun to face the seriousness of the problem. When a person’s health situation requires long-term custodial care, there are only three methods of payment available: cash from savings, Medicaid, and long-term care insurance. While Medicare will pay for most hospitalization and doctor bills, only a Long Term Care policy will provide coverage for home health care and nursing home expenses.

Long Term Care insurance is not for the wealthy- they can afford to pay for it themselves. And, it is not for the poor- they will have government funding to pay for it. It is for people in between who can see their lifetime savings depleting in order to pay for home health or nursing home care.

Because the problem of aging often revolves around daily care for the aged, many insurance companies offer Long Term Care insurance so that the families of the aging are not personally drained financially when taking care of their senior loved ones. We are licensed with the finest companies offering the product. Although this is a problem most people choose not to address, it is something that must be done while people are still healthy and the insurance is obtainable and affordable.

The Problem of Aging:
People age 65 and over are the fastest growing group in the United States. They currently number over 30 million people and are 13 percent of the population. In 25 years, it is expected that this will increase to 25%. People are living longer. There are 3.3 million people who have reached age 85 today. This figure is expected to triple within the next 5 years. As a result of the "graying of America", more medical help is required. Chronic aliments are striking more people and seniors can no longer depend on family to provide care. A recent study by the New England Journal of Medicine reports that over 33 percent of people over the age of 65 will spend some time in a nursing home. Half of them will be there for 90 days or less. The average stay for the other half will be a little over 2 and 1/2 years.

Nursing home costs are running $35,000 to $65,000 a year and more. Government statistics estimate that the chances of a person age 65 having to enter a nursing home is 37% for men and 49% for women. A person age 75 has a seven times greater chance of a nursing home stay than someone age 65. This increases to 14 times greater at age 85. At these costs and odds, its downright scary.

Medicare will pay only after a hospital stay of at least 3-days. Most people who enter nursing homes do not do so after a hospital stay. In order for Medicare to pay, the care given in a nursing home must be "restorative". The patient must be getting better on a daily basis. Medicaid, however, can and does pay for long-term care in a nursing home. Medicaid is the medical welfare system in which the federal and state governments pay for anyone not having the financial resources needed to take care of themselves..

Legislation:
Recent tax law changes have closed most of the loop-holes previously used by people to hide assets in an effort to qualify for Medicaid.

The new laws are getting very tough on people attempting to transfer assets in order to qualify for Medicaid, of January 1997, it is now a federal crime with penalties of up to five years in prison. Nursing home expenses and long-term care costs could wipe out 50 years of hard earned savings.

On August 22 ,1997 congress passed and President Clinton signed favorable tax treatment legislation for Long Term Care insurance. Subject to certain limitations, premiums for long- term care insurance will be deductible as a medical expense for those who itemize. The amount of premium eligible for deduction is limited and is based on the age of the taxpayer. The limitations are as follows :

In order to benefit from the new tax law, your long-term care policy must be of the new (tax-qualified) variety. These policies will co-ordinate with Medicare so that there is no overlap of benefits. Benefits received under these policies will be tax-free in most situations. Long-term care policies issued prior to the new legislation will be "grandfathered". If you already have a policy, the insurance company will amend your policy to bring its provisions in line with the new legislation. You will need to consult with your advisors to make sure that this has been properly done.

To receive a Long-Term Care quote, please fill out this brief form.

Professional Community Advisory Services, Inc.
4075 Hermitage Drive
Voorhees, New Jersey 08043
Tel: 856-424-0103
Toll Free: 1-888-424-1533
Fax: 856-424-0102
E-mail: info@profcommty.com