Good Health Raises Lifetime Care Costs

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Could someone discuss the pros and cons of putting money, tax-free, aside in an HSA? It seems like a no-brainer but no one writes about it. With the one time tax-free $7500 conversion from a traditional IRA it seems enticing.
Here in California, we are getting hammered with all levels of governmental fees and taxes rising with no increase in quality.
Thank you.

Pat of CA 10:42PM May 30, 2010

What is an appropriate age to get long term care insurance? Of course, premiums would be lesser at a younger age. And it may be easier to qualify. But then one may land up paying more to the insurance company over the lifetime.
As a general rule, age should not be a factor in determining if or when someone should purchase any type of insurance.
There are 2 objective factors to help determine if someone should purchase long-term care insurance:
Do you have the more important financial planning priorities in place:
• quality medical insurance,
• disability insurance (if you’re not yet able to retire),
• life insurance (if someone is dependent upon your income),
• all high-interest debt is paid off, and,
• you are maximizing your contributions to your retirement accounts each year (if you’re not yet able to retire)
If those higher priorities are not taken care of, then you should NOT purchase long-term care insurance no matter what age you are.
The next question to ask yourself is: do you have enough income (or assets) to justify the cost of the policy? As a general rule, if you are married and your total household income is under $50,000 per year (including re-investment income), you probably shouldn't purchase long-term care insurance because you could probably qualify for Medicaid without too much loss in lifestyle or assets.
Scott A. Olson
LTCInsuranceShopper

Scott A Olson of CA 11:47AM May 22, 2010

If you live beyond the age of 65, there's a 70% chance that you will need long term care at some point in your life. This is a strong probability, not a certainty but I sure wish people were better educated and planned better. Denial is the hardest obstacle to overcome. There's a lot of people that don't want to think about this planning and that delay- that ignorance - is having a real cost on the entire system right now.

Allison Payne, LTC Financial Partners of WA 3:26PM May 13, 2010

Odds are that not much long term care assistance will be needed before the 80s. People may use care assistance before their 80s but will get well or die before it goes to long term. Of course, not everyone living to be older will need it, especially those who are living with a relative or spouse.

Eriemaster of OH 3:22PM May 12, 2010

The aging population needs to consider adult day care as a cost effective alternative to nursing homes. Did you know that while costs differ based on the level of care and geographic region, nationwide averages show that the annual costs for medical adult day health services like those offered at Active Day http://www.activeday.com are roughly half of that for assisted living and less than one quarter of that for nursing home care? In many cases, Medicaid as well as private long term care insurance will cover the cost of medical adult day health services for individuals who qualify.

nccaregiver of NC 2:36PM May 12, 2010

Long-term care insurance premiums vary a lot from one company to the next. Your age, your health history, and your choice of benefits have a big impact in determining the premium. Get quotes from at least 6 or 7 of the top companies before choosing your policy.
Scott A. Olson
LTCInsuranceShopper

Scott A Olson of CA 11:28AM May 12, 2010

Long-term care insurance premiums vary a lot from one company to the next. Your age, your health history, and your choice of benefits have a big impact in determining the premium. Get quotes from at least 6 or 7 of the top companies before choosing your policy.
Scott A. Olson
www.LTCInsuranceShopper.com

Scott A Olson of CA 11:27AM May 12, 2010

Here is some basic advice when considering long-term care insurance.
Buy a policy that meets the federal guidelines, that's called a "tax-qualified policy."
Buy a policy that meets your state's guidelines, that's called a "Partnership-qualified policy." (unless you live in CA or NY).
Buy a Daily Benefit that is high enough to cover most of the cost of care in your area.
If home healthcare is important to you, make sure the policy allows for all of the Daily Benefit to be used for care at home.
As a general rule, buy a policy that has a "Maximum Lifetime Benefit" that is equal to your net worth.
If you are healthy, you should probably purchase a policy on your own, rather than through your employer.
Lastly, shop around.
Long-term care insurance premiums vary a lot from one company to the next. Your age, your health history, and your choice of benefits have a big impact in determining the premium. Get quotes from at least 6 or 7 of the top companies before choosing your policy.
Scott A. Olson

Scott A Olson of CA 11:26AM May 12, 2010