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Are the days gone when you could trust the assurance in insurance policies? Reading about the changes in  Long Term Care Plans  (LTC) for federal workers put things in a sharper perspective for me.*  So not losing everything you put into an insurance plan is supposed to be a benefit? Knowing personally what a solid private LTC policy could do to help a family member some 15 years ago,  I am  appalled by more recent experiences.  Over $10,000 of premiums a year and now the pay out for care can only last three years!  What if you out last that?

Many plans now already pay limited benefit towards the  hefty  $4000-6000 a month bill for assisted living or skilled nursing care.   As written before in this blog, if you can afford the escalating premiums you probably have other assets that you can spend down at the far end of you life span and maybe do not really need it at all.  Or you can not afford the $2000 plus a year premiums to start with.  Please understand Medicare does not now or may never pay beyond very strict parameters. Direct from Medicare.gov:  https://www.medicare.gov/coverage/long-term-care.html

When I ask people about LTC plans , there are three opinions:

1. Those who have paid up and  hope their premiums do not skyrocket so that they have to stop and accept a lower benefit.    

2. Those who falsely assume/ or just hope that  Medicare will take care of it.

3. People who think the whole thing is a swindle or at best a big gamble.

The latter group tends to be somewhat fatalistic about aging in general and act as what will happen – will happen.  My thought is that everyone has a personal idea of what our individual timeline will be and act accordingly. Because your parents may not have had a long life, you are missing that perspective.

Now to try to once again to interject my more positive slant.  Having read so much on the trends in  dealing with the wave of aging population  over the last few months, I think we are heading in a more positive direction out of necessity. There is recognition that only  13% of  people  have these policies even to start with.  Home health care does work well to keep people in their homes.  Paying for those home health care visits at  an average of $21 a hour is another point.

I would like to propose some kind of a savings plan/bond that is partly subsidized by our Medicare contributions with a higher interest rate to encourage you to put money away for your ‘keep me in my home helper’. Imagine a kind of a piggy bank with a sweet interest rate and a tax break.  We need new ideas on how to deal with this, as the private sector has a big crack in it.  What do you think? 

*  From the Federal Insider https://www.washingtonpost.com/news/powerpost/wp/2016/07/26/most-long-term-insurance-care-enrollees-are-eligible-for-little-known-benefit/?tid=a_inl