I work closely with those who are in the business of providing long-term care, mostly for the elderly, either in their homes or in an assisted living facility. When a member of the family needs help due to a life-changing health event, the family in crisis reaches out to someone in the care-giving business for guidance and direction. In their greatest moment of need, they are under tremendous pressure to make all of the arrangements necessary to provide the very best care for the family member they love. More often than not, this burden falls on the children of the person who needs long-term care. It’s a daunting responsibility. I know the feeling; I was once the one whose responsibility it was to help a friend in her time of need. It’s emotionally draining.
Several weeks ago, I was sitting across the desk of the sales and marketing director of a local assisted living facility. While we were speaking, her phone rang. She took the call, and as she spoke I could tell that the person on the other end of the phone had been tasked not only with finding a place for his parent, but finding a facility that was comfortable and that would meet his parent’s needs. Complicating the search was providing all of that within the assets his parents had. I could sense some frustration in the conversation as he realized that there wasn’t going to be enough money available to cover the cost of care needed. The gentleman on the other end was asking questions, hoping to find an answer as to how they would make up the difference between what they had and how to fund the rest. When the director got off the phone, she looked at me with genuine concern in her eyes and said that this call, and many others like it, was why I was there that day: to work together to help families plan early for the eventual need of long-term care. She said that she receives calls like this every day, all day, families searching for a facility that will fit into the family finances, generally a Medicaid budget. This means that the parents have exhausted all of their assets, down to approximately $2,000 dollars, and finally qualify for welfare and the government Medicaid program.
Will many of your members outlive their money?
Today, it’s estimated that approximately 10,000 baby boomers are turning 65 every day. It is no secret that we are living far longer than we did just 10 years ago. Incredibly for couples, there is a 97 percent chance that at least one of them will live another 10 years past 65, and an 89 percent chance that one of them will see their 80th birthday. Is it any wonder that one of the major concerns of today’s baby boomers is that they will outlive their money? The other major concern is that they will be a burden on their families. I’m afraid that many, many will experience both of these concerns in their lifetime. Medicaid, a state-run program, is already experiencing a major financial drain on each state’s economy. Unless these baby boomers have planned early for the eventual need of long-term care, the financial strain on the state’s Medicaid program will be tremendous, as well as on their families.
Recognizing this looming expense hovering over each state like a giant black cloud, the government instituted a new program hoping to encourage baby boomers to plan now for the expense of long-term care by purchasing private long-term care insurance and, through it, asset protection. This new program is called the Long Term Care Partnership Program. Unfortunately, this is possibly the best-kept secrets out there, but can be one of the greatest benefits to families. This is how it works: let’s say you purchase a $200,000 long-term care policy, and in the event you need long-term care you spend all of the money available in the policy. Medicaid would allow you to keep $200,000 of your assets (on a dollar-for-dollar basis), and you would still qualify for Medicaid. While receiving Medicaid, your future care needs could be supplemented by the $200,000 dollars preserved and you would continue to receive the care you desire.
The Partnership Program: a missed opportunity for credit unions members?
Where do you as a credit union come into play? Tens of millions of your members are entering retirement age. Many of them have been members for years, and possibly more than one generation. They have looked to their credit union for guidance and direction. How many of your members have been educated in long-term care? How many of them have even heard of the relatively new Partnership Program that has been adopted in most every state? Could long-term care insurance and the partnership program play a significant role in your members’ long-term quality of life and preserve their assets?
If you don’t offer long-term care insurance, I strongly encourage you to do so. The demand for long-term care insurance will continue to grow as resources for care continue to evaporate and the expense of the care continues to rise. I hope you consider the opportunity to gather the resources for, communicate with, and educate your members on the benefits of long-term care insurance. Broadcast to your members that there is another resource that can help them retain their dignity, independence, and control over their financial and emotional needs later on in life. Help your members receive the peace of mind that all desire, knowing that they have planned today for a better tomorrow.