Growing Older / Liz Taylor
Questions to ask about a long-term care policy
Q: I need help understanding what to do about my mother's long-term care policy. She purchased it six years ago at age 79. Her policy has no inflation protection, and her benefits are $110 a day, covering home care, nursing homes and assisted living. The elimination period is 100 days.
Mom's total income from Social Security is $12,000 a year, plus interest on $25,000 in savings. She pays $2,640 a year for her policy — which seems vastly disproportionate to her income!
What happens to the policy when she runs out of funds to pay the additional daily rate? Does this policy disqualify her for Medicaid? Would she be better off to dump it, pay for nursing care until she depletes her savings, then go onto Medicaid? Right now I live with her and will continue to do so as long as I'm able — I retired early to care for her. I don't know how to advise her. Her policy premium is due next month.
A: Being able to pay the premiums — without suffering undue economic hardship — is the first consideration when buying a long-term care insurance policy. Your mother's limited income made that decision questionable (especially if she has no home to supplement her savings). However, it appears she chose a good policy, and she's paid about $15,000 into it already. So, depending on the fine print, it might be worth keeping.
I turned to Bob Miller of LTC Financial Partners of Kirkland, who specializes in long-term care insurance, to help answer this question. Before canceling, he suggests you read the policy and ask four important questions.
The most important: How does the policy define "benefit triggers?" Is your mother disabled enough now to qualify for benefits?
Does the policy waive the elimination period for home care and respite? Many do. If it does, you can use this policy to hire in-home help to supplement the care you provide. Exhaustion is one of the main reasons families stop caregiving, so getting someone to help you will help you be a better caregiver longer. If the elimination period is waived for home care, your mom won't have to spend her small savings in order to qualify.
Does the policy pay full benefits for home care? If so, $110/day is a healthy sum to help you hire in-home help.
Are the annual premiums waived once she's eligible for benefits? If so, she won't have to pay premiums for her policy ever again.
If the answers are no, and your mother can't use her benefits soon, it's probably not worth investing more money in this policy.
Two other good questions : What happens if a person with insurance runs out of money and can't pay the uninsured portion of their care? Does having long-term care insurance disqualify someone from Medicaid? The answer to both: If a person meets Medicaid's eligibility test, their insurance benefit will go to the facility, and the state will pay the balance of the Medicaid rate — which is why the states should be doing more to encourage people to buy insurance, to reduce state expenditures for long-term care.
For people in their late 70s and 80s, a good rule of thumb: Buy as much insurance as you can afford — and forego inflation protection, which usually doubles the price.
Q: I often clip your columns for future reference since my husband and I are over 75. However, I was shocked to see you recommend "Final Exit" by Derek Humphrey in your June 28 column. Have you read this book? Would you want to visit your ailing elderly mother and, having killed herself, find her with a plastic bag over her head, secured by a tight rubber band around her neck? This is what this book advocates. Please reconsider your recommendation.
A: As I said in my column, this is an issue fraught with politics, political correctness, religion and deeply felt beliefs — and it needs to be aired rather than hidden.
Although most of us would prefer to die in our sleep, only a tiny fraction will. As medical science finds more ways to extend our lives (sometimes prolonging our dying, unfortunately), this is becoming even less likely.
Until mentally competent, terminally ill adults have the right to have life-ending medications prescribed (currently permitted only in Oregon and some other countries), people who experience intolerable suffering or who are terminally ill and want to control their own deaths will continue to use the alternatives.
Without advocating for any particular action, I want people to know their choices. Derek Humphrey's book is a thoughtful, well-reasoned attempt to do just that.
Liz Taylor's column runs Mondays in the Northwest Life section. A specialist on aging and long-term care, she consults with individuals and teaches workshops on how to plan for one's aging — and aging parents. E-mail her at email@example.com or write to P.O. Box 11601, Bainbridge Island, WA 98110. You can see all of her columns at www.seattletimes.com/growingolder/.
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