Do you know the Real Facts
of Long Term Care??
1) Medicare will pay if your
client needs to go to a nursing home.
2) Should your client need Long-Term nursing home care, your client can transfer their assets to their spouse or family & Medicaid will pay for it.
3) One of our two Americans over age 65 will need to spend some time in a nursing home.
4) The IRS will give your client a tax break if they buy Long Term Care insurance to protect themselves and their family.
5) The average cost of nursing home care is $40,000 per year.
Now for the answers!!
See how much you know.
1) False. Medicare does not pay. Medicare only helps to pay for skilled nursing care for defined periods of time, usually following hospitalization, custodial or long-term is not covered. Unfortunately, 95% of all nursing home care is custodial. The United States spends over $100 billions on nursing home costs, but Medicare only covers a very meager 2%.
2) False. Deliberate impoverishment is illegal. In 1996, Congress passed a new law called the Health Insurance Portability and Accountability Act (HIPPA), also known as the Kennedy-Kassebaum Bill after the two senators who sponsored it. It laid down the strict new guidelines about the individual's ability to transfer assets prior to entering a nursing home. Even more importantly, it established financial and legal penalties for "deliberate impoverishment" in order to qualify for Medicaid.
3) True. The chances are very high that you or your spouse will need nursing home care at some time. People are living well past the retirement age of 65 and on into their seventies, eighties, and beyond. With increased age comes the increased likelihood that some types of chronic illness will develop. Seven out of every ten seniors have at least one chronic condition such as diabetes, heart disease, osteoporosis, and so on. These impairments and secondary consequences they cause are very frequently the factors which lead to the need for long-term care.
4) True. You can get a tax break! The same law (HIPPA) which discourages people from shifting or hiding assets also took the very positive step of offering tax incentives to individuals and couples, who purchase a qualified long-term care insurance policy. Moreover a number of individual states are currently considering the revision of their laws to provide tax incentives as well.
5) True. Nursing home care is not cheap. It is important to remember that long-term care is just that, long-term. The average length of time an individual needs long-term care is several years. The financial impact on your client and their family is both devastating and unavoidable, unless they prepare carefully and realistically.
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