The Savage Truth About Long-Term Care
Thursday July 13, 2000
The Center for Long-Term Care Financing is glad to tip you to the strongest, most unequivocal endorsement of private long-term care insurance ever to come from the pen of a nationally syndicated columnist.
And if we hadn't told you about it, you might never have known. Nestled between stories like "How Women Really Feel About Other Women's Beauty" and "On Seducing Younger Men" in the June/July 2000 issue of "Mirabella," a young woman's magazine, is Terry Savage's moving, two-page article "Their Future is Now."
Savage is the personal finance columnist for the Chicago Sun-Times and Barron's Online. She is a frequent guest on TV news and commentary shows including Oprah!. Terry is also a long-time friend of the Center for Long-Term Care Financing and a subscriber to LTC Bullets.
Terry Savage's article in Mirabella begins with a touching story of her grandmother's decline into long- term chronic illness and dependency. When a live-in home health aide could no longer handle the situation, Terry and her mother reluctantly began to search for a nursing facility. Here's a sample of what happened next:
"Mom and I found the nicest facility available for my grandmother. Since she didn't have much in the way of assets, they told us the state would take over the monthly bill. But she couldn't remain in that sunny private room on the fifth floor. It was a choice I simply couldn't accept. And if it happens with your mother or grandmother, you'll be faced with the choice of tapping into your own savings after hers run out or taking the crowded, smelly, state-funded option--unless you had the foresight to purchase a long-term care insurance policy."
Ms. Savage continues in the article to give some very sensible advice about the downsides of Medicaid- financed long-term care and the benefits of private insurance. She concludes with this:
"When I bought a policy for each of my parents as a holiday gift a few years ago, the reaction was predictable. My father smiled and thanked me . . . and then went out for a jog. My mother's reaction was a little more emotional: 'After your grandmother, you promised you'd never . . . .' The words trailed off as we both remembered. Then I smiled at her and reminded her that this policy would pay for someone to come into her home and give needed care. We'd never have to face the issue of a nursing home (I hope and pray). And if we do, I know I've insured her the best of care. That's why I also bought a policy for myself."
The only advice in this moving article with which we disagree strongly is that "It's usually adequate to purchase only three years of coverage, as opposed to lifetime coverage." While it is true as Savage points out that the average nursing home stay is only two years, the purpose of insurance is to protect you against the risk of a catastrophic loss, not just an average loss. The marginal increase in premium to cover lifetime expenses is well justified for anyone who can afford it. There are many other creative ways to keep premiums affordable. (For examples, see the Center for LTC Financing's white paper: "The Myth of Unaffordability: How Most Americans Should, Could and Would Buy Private Long-Term Care Insurance.")
Terry Savage is also the author of "The Savage Truth on Money," an excellent 1999 best seller on personal finance, which you can find displayed prominently in most bookstores. It contains thoughtful advice on a wide range of topics including private long-term care insurance. She cites the Center for LTC Financing on page 276. Check it out.
Long-term care is a subject on which denial is too common and tough love is too rare. Three cheers for the Savage truth on this painful, but critical, subject.