Dear Carol: I encouraged my mother to take out a long-term care insurance policy when she was 80 years old. She is now 88. I'm wondering whether she should keep this policy. She has very little money saved, her income is extremely low and she is living off her very small nest egg just to pay her rent and expenses.
There's a very good possibility that her money will run out in a couple of years. At that time, she would most likely qualify for Medicaid, since her savings is the only thing keeping her from qualifying for it now. I wonder if it is wise to keep paying these premiums for the long-term health policy. It's costing her about $400 a month, which is difficult for her to pay. I'm afraid to cancel the policy and need some guidance. She's paid for eight years now, but should she continue to pay for a policy she may not need? - Ron
Dear Ron: How is her health right now? So much depends on that. She's been very fortunate to be reasonably healthy for this long. Nearly anyone at age 88 is going to have some health issues. Her age would indicate that, even though she is very healthy, she may need care of some type fairly soon.
If her policy would pay for in-home agency services, which is something you should check out now if you haven't, it may be worth your while to keep the policy. I know several people who are using their policies to pay for most of their in-home caregiver services. With the help of the insurance policy, the agency help that could cost $12 to $20 an hour may only cost $5 or so out of pocket.
Does the policy cover assisted living center expenses? Since Medicaid doesn't generally pay for that type of care, this could be important for your mom. If she remains fairly healthy, she may not require nursing home care but could benefit from assisted living care.
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You don't mention how much help she needs from you, but she is likely to need more care soon. Health issues can occur without warning, so you need to prepare the best you can.
If your mom needs care soon, and her policy would pay for the kind of care needed, you could protect her assets longer. In the end, I'd suggest that you check with an estate attorney or an elder law attorney. You really need a financial expert's opinion on this - one who knows Medicaid laws well.
Carol Bradley Bursack is the author of a support book on caregiving and runs a website supporting caregivers at www.mindingourelders.com . She can be reached at carol@mindingourelders.com .
