Thinking Long-Term

The financial burdens of long-term care--assistance to people who need help with the basic tasks of life, such as bathing, dressing and preparing meals--can be catastrophic. The quality of long-term care can be abysmal and the burden on families can be overwhelming.

All of this is from Georgetown University's Long-Term Care Financing Project, co-directed by Judith Feder, professor and dean of the Georgetown Public Policy Institute, and Sheila Burke, undersecretary for American museums and national programs at the Smithsonian Institution. They wrote in a policy paper that "despite these concerns, long-term care is not on the public policy agenda. It's time to recognize that long-term care is a serious risk that deserves serious policy attention."

For federal employees, though, long-term care has had that kind of attention for the past three years. The government now offers such an insurance plan. It's the kind of benefit that is easily forgotten; it's also one that could prevent the ominous outlook of Feder and Burke for people who one day will require nursing or in-home care.

Long-term-care insurance can protect assets from being depleted by this occurrence, since most health insurance won't. However, the premiums for such insurance can be prohibitively expensive for low-income workers. According to the Federal Long Term Care Insurance Program, if your assets, excluding your home, are less than $30,000, then long-term-care insurance is not cost-effective.

Medicaid covers long-term care, too, but with an important caveat. FLTCIP states that, in order to qualify for Medicaid to cover your long-term-care expenses, you must first spend all but $2,000 of your assets, except for your house and car. It also means receiving care from a limited number of state-approved caregivers, mostly institutions such as nursing homes, that are willing to accept Medicaid's payments.

FLTCIP reports that while about 60 percent of people who need long-term care are older than 65, about 40 percent are between 18 and 64.

The insurance provider also provides some head-turning cost statistics: Today, average nursing home costs are about $52,000 per year, assisted living facilities are about $25,300 and home care is more than $20,000. By the year 2030, those costs will rise to about $190,600, $109,300 and $68,000, respectively.

Slightly less expensive: the rates for the government's long-term-care insurance range from $6 to $605.10 a month, depending on your age and the breadth of your coverage.

Here's a tip for keeping costs down: Premiums are lower the younger you are when you buy. So, a forward-thinking 45-year-old can lock in a lower rate. On the flip side, this is an insurance plan, not an investment. You are required to pay premiums continually from the time you sign up; if you're more than 30 days overdue, your plan will be terminated and all the money you've paid up until then will be for naught.

Anyone interested in the federal program has to apply. You can print out an application and fax it to 1-800-632-3892, or mail it to:

Employees, retired employees, and many relatives are eligible for the coverage. There is no open season; applications are taken at any time.