My Dad used to say, “There’s got to be another way”. There usually was, and quite often, it was a better way. Sometimes we found ourselves in a corner and it didn’t look like there was a way out. Sometimes the “other way” was more difficult or costlier initially, but looking back, his decisions generally worked best for our family in the long run.
That seems to be the key. We often make decisions that look good for today, but don’t consider the possibilities or even the probabilities that we may face in the future. Several times in this column, we’ve examined some of those important decisions we make when we turn 65. We know we can be locked in for the rest of our lives, should our health and eligibility change.
By the time we look at the costs for Medicare and the costs of supplemental insurance to pay for expenses that aren’t covered by Medicare such as deductibles and copayments, we’re not anxious to seek out additional expenses that Medicare may not pay. Most of us don’t realize the potentially devastating medical costs that we may be liable for or may not even know they exist. In our lifetime, these costs could exceed all the other hospital and medical costs combined.
When Medicare was born in 1966, people would go into the hospital and stay weeks and even months, until they were healthy enough to go home. Medicare’s cost to the government skyrocketed and they knew if something wasn’t done quickly, Medicare would go bankrupt.
Medicare changed the rules. They published a book of over 500 DRGs or Diagnostic Related Groups which continue to increase in number today. It lists most of the illnesses or combinations of illnesses with which one might be admitted to the hospital. Each of these illnesses would be assigned a specific number of days that would be needed in the hospital before the patient would be discharged. Obviously, many patients would need additional care. To reduce Medicare costs, the patients would be transferred to other facilities that would provide that care at a lesser cost to Medicare than the costs to remain in the hospital.
I’m now going to use a couple of “dirty words”, but promise me you’ll stay with me to the end. It could save you a lot of money. The dirty words are “long term care”. Don’t leave me now! It gets better. We’ve discussed before, in previous columns, the many hoops we must jump through to qualify for Medicare benefits in care facilities. Most people who are in care facilities today are not receiving benefits from Medicare.
The insurance companies didn’t miss a beat. They invented policies that have helped to pay some of the expenses that Medicare doesn’t cover. In the 1980’s, we offered policies that were affordable and gave benefits for up to four years with low deductibles. At age 65, these policies did cost about $500 a year. We helped a lot of people with this type of protection. What happened?
The insurance companies kept refining the policies and adding additional benefits until the premiums went out of sight. One of the last long-term care policies we offered in the eighties had a premium for a married couple that exceeded $5000 a year. One of our clients commented that they could take a cruise for less than that. These policies are still on the market but obviously not affordable for most of us. People are obviously turned off by the what long-term care premium costs have become. So, what can we do?
We can’t stay in the hospital. Many of us can’t go home. We still need some level of care for weeks or months, but that care is now approaching $200 a day or even more with therapy and other special needs. How many months can we afford to pay before we’re looking at losing our life savings, our home, or even filing for bankruptcy?
What if we could go back to when times were a little simpler and insurance costs were more affordable? What if we could strip away a lot of the expensive bells and whistles and get a basic plan that would fill the needs for most of us? Instead of a plan that would pay lifetime benefits with cost of living benefit increases, we could get a plan that would pay for most of our costs for 4 months, 6 months, or a year? The average stay in a care center is usually less than 300 days. It’s estimated that 70% of us that are over age 65 will spend some time in a nursing care facility. What if we could get a benefit package as low as $50 a month? Would we sleep a little better at night knowing that there is another way – a better way – an affordable way?
It’s called Short Term Care. It’s available now and it really works. It’s comprehensive, yet simple and low cost. For most of us it may be the bridge we need to get that important care after we leave the hospital but, before we’re able go home. While we’re recovering, we don’t need to lay in bed and worry how we’re going to pay for it. As with most insurances, we need to buy it when we don’t need it, so we’ll have it when we do need it. There are health questions to qualify, but that is also how the costs are kept low.
I’m excited. I think this is going to open a lot of new options that we haven’t had available. I think it’s just what the doctor ordered. You don’t have to wait until you’re 65 or on Medicare. It’ll cost you even less and you may have a better chance of qualifying. What we need is one less thing to worry about. If you agree, give us a call and we’ll see if you qualify.
Orion Steen is a licensed agent and specializes in Medicare supplemental plans. He has been advising his clients on life and health insurance matters in Arizona for over 45 years. He can be reached for related questions by E-mail at firstname.lastname@example.org, call toll-free 888-846-6891 or cell 623-846-6891.