Long Term Care Insurance Planning in California
The Cost of Long Term Care in California
The cost of receiving long term care services in California is very expensive. Whether you plan to pay for these costs out of your own retirement savings or whether you plan to buy long term care insurance you need to be aware of the costs for different levels of long-term care in California.
In California, long term care costs in nursing homes are approximately $7000/month for skilled nursing care or $230.00 per day.
Costs in San Francisco and the Bay area are the highest, approximating $12,000 to $15,000 per month or over $500.00 per day.
Long term care costs in nursing homes Los Angeles and San Diego are somewhat lower, but yet still very expensive generally around $250.00 to $300.00 per day, or $90,000 to $110,000 per year.
If you are fortunate enough to receive your care at home, or in assisted living, the monthly expenses out-of-pocket are much lower, generally around $4000 month. See the current 2013 Cost of Long Term care chart below for California cities and areas.
|City or Area||Home Care||Assisted Living||Nursing Home|
So, with the costs of long term care being so high in California how can you plan to receive the care you may need without spending your assets and retirement savings you have built over your lifetime?
The answer: Purchase a long term care insurance policy certified by the California Department of Health Services with policy value benefits equal to or greater than the value of your assets you wish to preserve.
The California Long Term Care Insurance Partnership Program
How does the California Partnership for Long-Term Care work?
The California Long Term Care Partnership is a public-private arrangement between the State of California Department of Health Services and select insurance companies that offer long term care coverage. Through this arrangement, purchasers of California Partnership LTC policies receive MediCal Asset Protection. This asset protection beenfit guarantees you get to keep a dollar's worth of assets for every dollar of beenfits your Partnership policy out to you for long-term care services.
If you exhaust your Partnership policy benefits, you may apply to Medi-Cal and rather than being required to spend down your assets to the poverty level Medi-Cal normally requires you are entitled to keep your assets equal to the amount of benefits your policy has paid out to you.
The State of California will also disregard the assets when making a claim through Estate Recovery.
Example: Linda is 65 years old and has a nest egg amounting to $80-0,000. Linda wishes to protect her assets to leave a legacy to her children and grandchildren. Linda is also concerned about long term care costs that currently average $7000 month in $2013 in California.
Linda has fixed social security income of $1900 month. Linda elects to purchase a California Partnership policy to protect her assets from the costs of long term care. Linda purchases a policy with $5100 month benefits and an inflation protection feature of 5% compound.
At age 85 her policy benefits have automatically grown to $13,500 per month. Linda has a stroke and receives insurance policy benefits for 5 years. Her Partnership policy pays out over $800,000 of long term care benefits. Linda may now apply to Medi-Cal. Linda is not required to spend her assets down to $2000 to receive Medi-Cal assistance. Because Linda purchased a California Long Term Care Partnership policy, Medi-Cal wil cover the remainder of Linda's care and she can shield her $800,000 nest egg from California Estate Recovery.
California Long Term Care Insurance Services and Rates
So, how do you obtain a long term care insurance policy that qualifies for California asset disregard protection?
And how much do these California Partnership Program policies cost?
Well, today only a select few long term care insurance companies such as New York Life (A++ Rated by AM Best) and John Hancock (A+ rated by AM Best) offer Partnership policies in California, although new policies are expected to be approved shortly.
Today, it is necessary to meet the minimum threshold requirements for your policy to be California Long Term Care Partnership eligible. The minimum requirements are that you purchase $170.00 day benefit or greater; and it is required that you elect 5% compound inflation protection.
Rates and costs of California Partnership policies are based upon your age, health, and marital (or partnered) status at time of application.
Get California Long Term Care Insurance Quotes
I am an independent agent and will help you compare the best rates and policies from the leading long term care insurance providers such as Mass Mutual, Genworth, Transamerica, Mutual of Omaha, Lincoln Moneyguard, Pacific Life, State Life/One America, and more.
For free quotes and expert, unbiased advice call me at (800) 891-5824 or complete my quote request form.
Thank you for reading my blog.
Jack Lenenberg, J.D.
CA License # 0H07738