The long-term care insurance argument

Bard Lindeman

Long-term care insurance is the new “Third Rail” of aging. Touch it, brothers and sisters, and you’ll sizzle from the electric charge!
I had the temerity to quote recently from a splendid text, “Choose the Right Long-Term Care: 4th Edition,” by attorney Joseph L. Matthews (Nolo Press, Berkeley, Calif., 2002). Matthews writes that for 95 percent of the population over age 65, “LTC insurance is not a good bet.”
He further suggests potential buyers should first check the latest analysis of LTC policies done by Consumer Reports magazine (check your local library or the Internet: www.ConsumerReports.org).
Please note: The complaints that follow, largely, are from correspondents with a bias. For example, insurance company folks with quotas to fill during hard times.
n First up is a Chicago-area public relations woman who, after reprimanding me for doing readers an alleged disservice, has the gall to add: “My client (guess what this client sells?) tells me your thinking is about 10 years behind the times.” Tell that to author Matthews.
Then, Frances the flack continues: “Here is a piece (article) we wrote on the subject.” Bully for you, but stow it!
n Aillene, from Arizona, files this sad dispatch: “I’ve been caregiver to my mother, who is 92 and has Alzheimer’s, over five years. Our combined monthly income ($4,100) doesn’t cover living expenses, medication and custodial products. I am exhausted and depressed much of the time. Our situation convinces me LTC insurance is more important than life insurance, and is worthwhile at any price.”
Caregiver Aillene, 66, bought a LTC policy for herself. She is paying $142.50 a month. Should she need it, she’ll receive $100 a day for assisted living, for four years. Finally, she says: “I tell everyone to buy a policy as young as possible.”
Comment: I’ve written that no one can care for an Alzheimer’s patient alone. The situation breeds despondency and despair. My sympathies to Aillene. Lastly, if ever she needs her LTC insurance, I fear $100 a day by then will just about buy lunch.
n Agent Scott A. Olson writes from Valrico, Fla., making the point that in most states “Medicaid has very limited home health benefits.” Therefore, to Scott’s thinking, LTC insurance is made more attractive because “Most policies (today) allow all the benefits to be used at home.”
Olson also adds, “I use $200,000 net worth (not $300,000) as my cutoff for which retirees should, or shouldn’t, own LTC insurance.”
Comment: The thinking on $300,000 (not including the value of the home) as a sum at which you should consider LTC protection is predicated on the idea that you surely would choose to protect this savings pool.
Unspoken, perhaps, is the philosophy that those with much less in total assets will either always stay healthy or depend upon family members being the caregivers in the home. It’s also possible that driven to the wall, they plan on “spending down” and applying for Medicaid.
Is this latter strategy ethical? And moral? Attorneys specializing in tax avoidance argue it is legal; Congress wrote regulations permitting it. Few can defend the morality of such behavior, which nonetheless is widespread.
Bard Lindeman welcomes questions from readers. Write to Bard at 5428 Oxbow Road, Stone Mountain, GA 30087-1228; fax to 404-815-5787; or send e-mail to belindeman@earthlink.net.