LTC Bullet: Money Magazine Recommends Boomers Protect Parents
Friday October 16, 1998
Kelly Smith's article "Wealth Insurance" in the Nov. 1998 issue of Money Magazine profiles Jeff Hooke and Martin Cohen - two boomers who pay their parents' long-term care insurance premiums. According to Smith, "many boomers are realizing that they may ultimately bear the cost of their parents' long-term care, whether in the form of a forgone inheritance or as out-of-pocket outlays."
Others might ask: "Why not rely on Medicaid to pay the bills?" Martin Cohen -- the profiled 51-year-old print shop owner who pays his father's LTC insurance premiums -- hits it on the head: "With the insurance, I'm much more confident that I will be able to keep [my father] out of a nursing home."
LTC insurance preserves choices. Boomers, who demand choice in their own lives, can help their parents secure the best possible and most appropriate care across the spectrum of care settings.
The following letter-to-the-editor authored by Center President Stephen Moses responds to Ms. Smith's welcome article:
October 15, 1998
Congratulations and thank you for publishing Kelly Smith's outstanding article, "Wealth Insurance" (November 1998), regarding the importance of long-term care planning.
Ms. Smith's recommendation that adult children pay or subsidize the long-term care insurance premiums for their aging parents is truly wise advice indeed. I have paid the cost of my parents' long-term care coverage for ten years. Why should they pay to protect my inheritance? I have never before seen this practice recommended in a national publication, however.
Good work! Sadly, too many of America's World War II generation are dying in nursing homes on welfare because they and their baby-boomer heirs were unaware of this devastating health and financial risk.
When you publish excellent advice of this kind, you make an important contribution to the well being of our country's social safety net as well as to your readers' estates.
May I offer one important correction and one addition, however?
The advice to buy long-term care insurance only if one has more
than $100,000 in assets is unsound, especially when the adult
children are willing to pay the premiums. The most important reason
to buy private LTC insurance is not asset protection! It is rather
to assure access to quality care at the appropriate level in the
private marketplace. Someone with low assets and income can easily
Finally, Medicaid truly is a trap you should warn your readers
to avoid. Because most people do not worry about long-term care
until chronic illness strikes, they often find themselves suddenly
in need of expensive care when they can no longer qualify to insure
privately. (You cannot buy fire insurance when your house is in
flames nor LTC insurance when you already have Alzheimer's Disease.)
Unfortunately, a large and growing army of private "Medicaid
estate planning attorneys" entices the vulnerable elderly
and their heirs with a wide array of esoteric techniques to qualify
for publicly financed nursing home benefits by means of artificial
impoverishment. These lawyers offer the heirs an early inheritance
and taxpayer-subsidized nursing home care for the parents. Once
they have lost their assets, however, the parents, often frail,
infirm, or cognitively impaired by this time, lack the financial
wherewithal to remain at home or pay for an assisted living facility
in lieu of nursing home care. They become wards of the state,
cared for at public expense, while their estates frequently pass
unencumbered to legally savvy heirs at the expense of the taxpayers.
This is the single most common and egregious example of financial
abuse of the elderly in America today. Unfortunately, it is not
only legal, but also encouraged by perverse incentives in Medicaid
The Center for Long-Term Care Financing in Seattle, Washington is dedicated to disclosing and correcting these problems. Thanks again for a timely article that contributed significantly to our mission.
Stephen A. Moses