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The death of long-term care and how to replace it

It's estimated that more than half of us will require some long-term care at age 65.
Credit: PHILIPPE HUGUEN, AFP/Getty Images
Staff members speak with an elderly woman

Financial Planners are increasingly telling clients not to purchase long-term care insurance.

The number of insurance companies offering the plans continues to dwindle, benefits no longer cover all daily expenses and the policies have never been more expensive.

In fact, middle-income wage earners, or those with who make an average of $87,500 a year, have now been priced out of the long-term care market, according to statistics from the Life Underwriters Association, Consumer Reports, Long Term Care Associates of Bellevue Washington and the American Association of Long-Term Care Insurance.

The most recent average cost for a couple is almost $6,000 a year. And, policyholders are being advised they could face a 50-percent premium hike down the road because no one can predict where health care might be going next.

Worse yet, many of these policyholders, because of financial decline or cognitive issues in their later years, let the policies lapse and they lose everything.

This includes not only the future benefits they were paying for but all the money they've put in as well.

It's estimated that more than half of us will require some long-term care at age 65.

We will probably require less than two years of care that will be priced at an average cost of $138,000.

Forty percent of Americans mistakenly believe Medicare will foot that bill.

Only about two in ten of us can currently afford any kind of coverage at all, even if we can find a provider.

Insurance companies have been abandoning the long-term care market in droves. There were more than 100 providers in the early 2000s. Now there are fewer than a dozen. Experts say that's because we are living far longer than most policy terms will support.

"Many people are living, you know, way into their 80's and 90's," the Colorado Gerontological Society's Eileen Doherty said. "They are also using the benefit longer. The insurance companies, rightfully so, are in the business to make a profit. And long-term care insurance has not been as profitable as one might hope."

Care providers are looking for ways to help bridge the gap.

For example, there's an innovative program being implemented by Lutheran Medical Center and the Seniors' Resource Center in Wheat Ridge.

It' called "Perfect Homecoming."

The agencies have teamed up to help patients through the hospital process. Its one of the first programs of its kind in the country.

"We have a team of nurses, we have RN discharge navigators, we have care coordinators and we also have utilization review nurses," Kendra Casson, the Director of Care Management for Lutheran said.

She says the program is comprised of more than 30 people in total, including a pharmacist, doctors and case managers, all working together and shepherding patients from hospital entry to hospital exit.

Dr. Jeff Bontrager at Lutheran calls the program the success and said patients have a much better outcome when they are released into more supervised care, rather than just sent home.

"Sometimes that's a skilled nursing facility, sometimes assisted living, sometimes it's home health care, and our care managers help us sort out those details," Bontrager said. "They're speaking with the therapist who is helping to determine the plan as well."

Stephanie Martinez is a social worker in the Lutheran/SRC program. She said the key is simply getting everyone, including the patient, on the same page.

"Being able to coordinate their own care is very overwhelming for older adults," she said. "So that's what we try to help them with."

The Seniors Resource Center then steps in with a long list of services including transportation, home care services and even meals prepared in their kitchens on Chase Street.

"They have help with light housekeeping, meal preparation and laundry," Perfect Homecoming Care Manager Heather Brozek said. "Just those things that you can use a little extra hand when you're not feeling as strong as you're used to feeling."

Remarkably, the services in this program are provided for free by the Lutheran Foundation. It's an innovative program funded by various community resources which are working to find a way to care for a lot of people now locked-out of the long term care insurance market.

The experts add that the best solution in our present economy, in lieu of long term care insurance, is a reverse mortgage on one's home.

There are no premiums, guaranteed income, and those who opt for this solution won't their home.

Another option is a "short-term care" policy. It covers up to 360 days in a home or facility, is easy to qualify for, and is far less expensive than traditional long-term care.

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