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Jewish World Review June 4, 2003 / 4 Sivan, 5763

Jan L. Warner & Jan Collins

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Consumer Reports

Long-term care insurance comes up short | Q: My parents are in their late 70s. When Dad suffered a stroke last year, Mom kept him at home until he fell and broke his hip. After being treated, he was sent to a nursing home for rehabilitation. Unfortunately, he will not be able to come home again, because Mom takes six medications herself and can't care for him. They bought long-term care insurance when they were in their early 70s, because they did not want to be a burden on us or on society. But the coverage they scrimped and saved to buy pays only $50 per day toward Dad's care which, including the extras, will cost almost $200 daily.

Dad's monthly income from Social Security and a small pension is $1,000; Mom receives only $540 per month. They have only $35,000 in savings, their home and two small life insurance policies that won't even cover their burial expenses. I was furious to learn that they were actually going into their meager savings to buy this coverage, which was quite expensive because of their ages when they bought it. When I finally located the person who sold them the policy, he told me that was all they could afford, and that it might be a good idea for Mom to get a reverse mortgage on the house to pay for the balance of Dad's care. It seems to me that my parents were scammed. Is there anything we can do?

A: The "advice" -- if you can call it that -- which you and your parents received is, in a word, obnoxious. First of all, your folks should not have been sold long-term care insurance. Second, your mother should not put the remaining assets at risk. While many people are descending on Congress -- and rightfully so -- to encourage Americans to purchase long-term care insurance by giving tax credits and other incentives for premiums paid, there are tens of millions of Americans, such as your folks, who are either uninsurable or simply can't afford to pay for the coverage. Tax credits won't help your parents, who are perfect examples of people who should not be sold long-term care coverage. They are part of our nation's most vulnerable population who will be forced to rely on Medicaid (the joint federal and state program that pays a significant percentage of nursing home costs each year).

While it's important to ensure that your father receives the appropriate care, your mother's needs must not be forgotten. With a home, little money in the bank and a small recurring monthly income, your mother is a member of the fastest-growing segment of the aging population. Since most women of your mother's age don't have pension benefits, they will depend on Social Security, which is generally insufficient. As an older woman, she can statistically expect to live alone, spend a large part of her life disabled or in a nursing home, and be impoverished. In fact, women make up nearly 75 percent of all older Americans with incomes below the poverty level.

You should consider getting a qualified attorney ( for your parents. Your mother should not be required to spend one penny of their remaining assets or put the home equity in jeopardy. But be aware that Medicaid is underfunded each year by billions of dollars, and the deficits are growing. These deficits are attributable not only to increasing costs, but also to shrinking tax revenues due, in part, to recent tax cuts and fewer workers per retiree. As the Baby Boomers begin to retire, the number of Americans needing governmental assistance with long-term care costs will grow. We believe it is dishonest and disingenuous for politicians on both the federal and state levels to refuse to face the facts. They must fully fund the Medicaid program for people in need like your parents.

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JAN L. WARNER received his A.B. and J.D. degrees from the University of South Carolina and earned a Master of Legal Letters (L.L.M.) in Taxation from the Emory University School of Law in Atlanta, Georgia. He is a frequent lecturer at legal education and public information programs throughout the United States. His articles have been published in national and state legal publications. Jan Collins began co-authoring Flying SoloŽ in 1989. She has more than 27 years of experience as a journalist, writer, and editor. To comment or ask a question, please click here.


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Private pay nursing home residents pay more
Separated families should use care managers
What Makes Up a Caregiving Team?
Who is the client, parents or children?:

© 2003, Jan Warner