From the January 2010 issue of Boomer Market Advisor • Subscribe!

January 23, 2010

LTCI seems to be DOA

By Van Mueller

There are many ongoing debates in America about how to deliver affordable health care efficiently and in a way that will provide the American people the most value for every dollar they spend. The permutations are endless. Progress is evasive. However, at least this important issue is being discussed. Unfortunately, the debate does not yet include the cost of long term care.

Here are some important statistics to consider: It is predicted that 70 percent of Americans age 65 or older will need long term care during their lifetimes. The average cost of nursing home care in this country is $78,000 per year and, depending on where you live, costs range from $60,000 to $150,000 per year. New York State predicts that costs could rise as high as $1 million per year by 2030. Costs are increasing exponentially for many reasons. However, the main reason is that more people will need care and fewer people will be available to provide it. Our discussion about the future of health care should include long term care.

Overwhelming costs
To be honest, the government does not include long term care in this discussion because it can't afford to. There are approximately 16,000 nursing homes in America. They house almost two million people. These costs are overwhelming government at their current levels, and it will get worse when the boomers retire.

The Centers for Medicare and Medicaid Services just cut $16 billion in nursing home funding. State budgets are in such jeopardy they are cutting all areas, including Medicaid. Americans will be expected to pay more out of pocket. Our industry will be left as the primary source of funding for long term care.

Start the discussion
We can do it, provided we start the discussion with our prospects and clients now. Families must work together. Parents and children paying for the parents' long term care coverage provide multiple benefits. Parents' estates can be preserved. Parents stay independent. Children can provide care without being imposed upon. Dignity can be preserved for all family members.

Our industry is creative, and it continues to develop ways for our clients to use the same dollars for multiple purposes. We have amazing long term care policies. Our industry now offers life insurance policies where some of the death benefit may be used for long term care. New annuities are being developed that provide long term care benefits. We continue to find ways to leverage our clients' dollars.

You have the products people are looking for, with benefits that are certain not to be provided by government. Have this conversation with every prospect/client.

Van Mueller, LUTCF, is a long-term care agent, writer and speaker.

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