April 18, 2001
following article by Center for Long-Term Care Financing President Stephen Moses
was published in the Spring 2001 edition of "Staying Connected"
Connected" is a client-contact newsletter published by three of the leading
long-term care insurance agents in the United States:
Alan Levine, Gary Melnikoff, and Gene Cutler. The article demonstrates
how savings, investment and insurance can ensure access to quality long-term
care at the most appropriate level and can help save our scarce
public resources for the truly needy.
Americans want to be good providers for their families and good citizens.
Both responsibilities require forethought, vigilance and planning. Today,
the least expected and most daunting challenge for ourselves and our country is
to provide competent, humane and loving long-term care for our elders . . . and
ultimately, for ourselves. Yet, we
are unprepared--as individuals and as a country--for this responsibility.
older Americans, and fewer-still baby boomers, have private long-term care
insurance to help with the catastrophic cost of long-term care for chronic
illness. Consequently, most people
end up in nursing homes on public welfare when they need professional care
instead of paying privately for help in their own homes or assisted living.
Why does this remain true even as the age wave begins to crest and
threatens to crash upon us soon?
35 years, our government has tried to provide long-term care services through
Medicaid and Medicare. This effort,
while well intentioned, has never provided adequate care to enough people in the
most desirable settings. But it
has, unintentionally, de-sensitized us to the risk and cost of long-term care.
Today, the government-financed, welfare-based, nursing-home-oriented
system is falling apart, characterized by limited access, poor care, and
government needs to act quickly to educate the public about the necessity to
plan early and save, invest or insure fully for long-term care.
Will it? There is hope.
The new Bush Administration supports and Congress has introduced
legislation to provide above-the-line tax deductibility for private long-term
care insurance. If passed, that
legislation would essentially give every American a discount on the insurance
equal to his or her marginal tax bracket. There
is also strong support for a proposal to assist current long-term caregivers
with a tax credit or additional exemption.
will probably see measures of this kind passed by Congress and signed by the
President sometime in the next year. They
will help, but they will not alone solve the problem.
As long as most people continue to ignore the risk of long-term care,
avoid the premiums for private insurance, and rely on Medicaid and Medicare for
benefits if and when they require expensive care, no amount of
government-sponsored education or tax breaks will change the underlying
That is why the Center for Long-Term Care Financing has proposed a program called "LTC Choice." The essence of LTC Choice is to encourage people to save, invest or insure for long-term care, but if they fail to prepare--give them a line of credit on their estates to pay for quality long-term care in the private marketplace at the most appropriate level, such as home care, assisted living, and the best nursing homes. Giving people a supplemental income, secured by and recoverable from their estate, helps prevent the indignity of welfare dependency, relieves the burden on taxpayers, and encourages everyone, including heirs, to plan early and insure fully for long-term care.
LTC Choice likely to become law? Perhaps,
but not anytime soon. The impending
crisis, when the massive baby boomer generation starts taking out of Social
Security and Medicare instead of paying in, will have to become much more
serious before public officials will take action.
In the meantime, we can at least prepare for ourselves and for our own
families, by making sure we are protected.
so doing, we also fulfill our responsibilities as citizens.
A wag once noted, "the best way to help the poor is not to become
one of them." The best way not
to become poor is to take the risk of long-term care seriously and make sure you
have adequate insurance protection for your own family.
Then encourage everyone you know to take similar action.