What's All This Talk About Long-Term Care Insurance?

By Bob Hamilton
General Manager, CSFEWBC

By now it is certainly no secret that CSFA is making long-term care insurance coverage available to firefighter's families. The CSFA endorsed LTC plan offers tremendous discounts to the CSFA firefighter's spouse, parents, parents-in-law, siblings, and other extended family members. Many of you have been asking questions about long-term care insurance so we thought it would be a good idea to give you some useful information.

Today, baby boomers and their parents are requiring long-term care services in record numbers.

• 60% of all Americans who reach age 65 will need long-term care at some point in their remaining lives.
• 45% of Americans know someone who has needed long-term care.
• Over 25% of adult population has provided care for a chronically ill or aged family member.

The high and rapidly rising cost of long-term care makes it one of the most ominous financial threats facing seniors in the U.S. today. The average cost of a year in the nursing home is about $52,000, and full-time care at a home can cost twice that.

If current trends continue, the annual cost of being in a nursing home will increase to $190,000 by 2030. Cost for a visit by a home care aide will rise from $77 today to over $366. Since most people average three visits a week, the annual cost of an aide will rise from about $12,000 per year now to about $57,000 per year in 2030.

To put all of this in perspective, today's 55 year old would have to save $4,400 a year for the next 30 years (and earn 7% interest before taxes) in order to pay for two years ($300,000) in a nursing home beginning at age 85.

To sum up: The need for long-term care can strike anyone, at anytime, without warning. Your chances of needing care at some time are almost one in two. Your current insurance won't help pay the expense. Medicare was not designed to cover long-term care and MediCal is almost out of the question. A family member may help with your care, but for how long, and at what cost? You can take steps now to insure for the future.

The California State Firefighters Employee Welfare Benefits Corp. (CSFEWBC), your Benefits Division, recently completed an extensive search for the best long-term care plan. CSFEWBC along with their broker Myers-Stevens reviewed dozens of plans and have selected Life Investors (A Transamerica Company). This plan will provide tremendous benefits and great discounts to our firefighters and their extended family. Contact Myers-Stevens at 800-827-4695 for more information.

¹U.S. Department of Labor.Advisory Council on Employee Welfare and Pension Benefits. Report, Findings, and Recommendations of Working Group on Long Term-Care., 14,2000.

²Ibid.p.53.

3Americans for Long Term Security, "Did You Know,"July 26 2001, p.1.

4 The Looming Crisis, American Health Care Association, 200.p.1.

5 "Some Observations About Senior Citizen' Freedom To Work Act of 2000", Journal of Financial Service Professionals, 1/2001.

6"From Childcare to Eldercare: Our Turn to Care for Mom and Dad", Journal of Financial Services Professionals, 9/99.