De-mystifying the Deficit Reduction ACT OF 2005 for Long Term Care Insurance

A question that many people ask me is why is there such a big push for consumers to plan for long-term care costs?   Well, perhaps the real reason is that the first wave of more than 75 million Baby Boomers turns 60 this year.   “By 2030, Medicaid’s (Welfare) expenditures for long term care alone could reach nearly $134 billion, a 360 percent increase.  While the annual cost of a facility stay is nearly $60,000 per year now, it is expected to increase to $200,000 by 2030.”  ACLI, 6/18/2004.* The message is clear—consumers are urged to plan now for future long-term care needs because there is simply not enough money to fund everyone’s care. On February 8th, 2006, President Bush signed the Deficit Reduction Act of 2005.  The changes in this law substantially alter eligibility for the Medicaid long-term care benefit, and also will help to expand the number of states offering long-term care “partnership” programs beyond the existing four states. The law encourages Americans to take control of their long term care planning and serves as a reminder that the Medicaid long term care benefit will only be available to those who are truly needy.  Those who can afford […]

Continue Reading