Don’t Be Too Quick to Judge Medicaid: You Might Need It in Retirement

Don’t Be Too Quick to Judge Medicaid: You Might Need It in Retirement

Long-term care planning is an important part of retirement planning and something we regularly talk to our clients about. One thing people often don’t realize, as Jordan Rau in this helpful NY Times article points out, is that Medicaid plays a vital role in long-term care planning and currently accounts for 42 percent of Medicaid expenditures. Some also don’t realize, as Rau continues, that many recipients “entered old age solidly middle class but turned to Medicaid, which was once thought of as a government program exclusively for the poor, after exhausting their insurance and assets.” Medicaid, then, isn’t a merely a system for the poor who need food assistance, but rather it’s an important social safety-net for retirees who can’t keep up with the pace of health care costs: A combination of longer life spans and spiraling health care costs has left an estimated 64 percent of the Americans in nursing homes dependent on Medicaid. In Alaska, Mississippi and West Virginia, Medicaid was the primary payer for three-quarters or more of nursing home residents in 2015, according to the Kaiser Family Foundation.   “People are simply outliving their relatives and their resources, and fortunately, Medicaid has been there,” said Mark Parkinson, the president of the American Health Care Association, a national nursing home industry group. With all of the proposed changes taking place in congress, the full article in the NY Times is worth reading, and I think it provides a helpful perspective on the need for health care reform and the need for responsible, proactive retirement...
FAQs about Long Term Care Planning

FAQs about Long Term Care Planning

Our firm recently attended a continuing education session on long-term care planning, a topic with which we regularly assist our clients. One of the panel speakers, Brian Gordon with MAGA Long Term Care Planning, followed up to provide us with a helpful recap of some of the questions we tackled: Q. What’s the best age for clients to consider purchasing LTCI? A. This isn’t a question of chronological age, but rather a person’s stage of life. The best time to purchase is when: A client is financially stable and feels premiums are affordable and can be maintained. A client wants to protect retirement income. A client has limited debt. So if you have clients or family members who meet these criteria, regardless of age, now is the best time to plan for the consequences of a long term care event. Remember, the longer a person waits, the more expensive coverage will be and the more likely that a health issue could impact their premium or eligibility.  Last year, the average age of our clients purchasing new policies was 56 years old. Q. What conversation should I have with affluent clients who want to self-insure their LTC risk? A. If your clients can afford to self-insure, that’s fine. But they’ll need to plan it out with you. Ask them to identify exactly what funds they would liquidate first to pay for a long term care event and make sure it’s not already earmarked. We also would shift the conversation to catastrophic coverage.    We have many affluent clients who—after having that conversation—elect to self-insure part of their risk and obtain...