The ColoHealth Health & Wealth Newsletter
June 2024
Vol. 14, Issue 9
How to Protect Yourself Against Alzheimer’s Disease
Long-term care costs are a serious threat to wealth.
The costs of care can eat through a pension, and deplete savings and assets rapidly. According to the most recent Genworth Cost of Care Study, the median cost of a semi-private room at a skilled nursing facility now tops $104,000 per year.
Here in Colorado, it’s $113,698
Traditional health insurance doesn’t cover it. Neither does Medicare.
Medicaid can help, but only after you have spent nearly all your assets. And after you’re gone, Medicaid recovery agents can come to seize your home to repay the government.
The good news is you can protect yourself, your loved ones, and your financial legacy. But it takes some proactive planning.
Here are some steps you can take now to protect yourself later.
1. Long-Term Care Insurance
Long-term care insurance is designed to cover the costs of services that assist with activities of daily living, such as bathing, dressing, and eating.
It’s different from health insurance and health sharing, which focus on acute medical conditions and don’t cover long-term custodial care for chronic conditions like Alzheimer’s and dementia.
Traditionally, long term care insurance provides a specific daily benefit. Typically, benefits start when you are diagnosed with a cognitive impairment or when you need assistance with a certain number of activities of daily living. There’s usually a waiting period of 30 to 120 days before the daily benefit kicks in.
Long-term insurance policies may be tax deductible. Your Personal Benefits Manager can help you find a qualified tax-deductible long-term care policy.
You can also purchase hybrid life insurance policies with a long-term care benefit, as well, though these don’t typically qualify for tax deductions.
Typically, benefits start when you are diagnosed with a cognitive impairment or when you need assistance with a certain number of activities of daily living.
The monthly cost of long-term care insurance depends on your age, health, and the specific benefits you choose. It’s generally less expensive if purchased at a younger age.
Unlike traditional health insurance products, long-term insurance is medically underwritten.
Therefore, it’s always best to purchase it while you’re in relatively good health. The sooner the better, because as we all know, you could have a medical event tomorrow that could make it difficult or impossible to purchase long-term care at any price.
2. Disability Insurance
Medical insurance and health sharing plans pay your doctor.
Long-term care insurance pays for your nursing facility.
Disability income insurance pays you.
If you have an accident or illness that prevents you from working and earning a living, your disability insurance policy steps in to pay you part of your pre-disability income – usually between 50% and 65%.
This coverage can be critical to help you keep food on the table, and a roof over your head, and to help you keep paying life insurance and long-term care insurance premiums to keep those other critical forms of protection in force.
Again, disability insurance is medically underwritten: You need to buy it when you’re in good health, or you may not be able to buy it at all.
Your Personal Benefits Manager can help you select the right kind of disability insurance coverage for you.
3. Health Savings Accounts (HSAs)
Health savings accounts enable you to pay for long-term care services and all other qualified medical expenses with tax-free dollars.
This can save you anywhere from 15% to 46% on these expenses, depending on your location and income tax bracket.
You can even use HSA dollars to pay qualified long term care insurance premiums. So HSAs and long term care insurance make a great pairing.
To contribute to an HSA, you need to either enroll in a qualified high deductible health plan (HDHP), HSA SECURE, or if you have another health sharing plan, purchase HSA MEC as an add-on.
The combination of HSAs and long term care insurance is a tremendous tool in protecting yourself and your family against Alzheimer’s risk.
4. Trust and Estate Planning
You may want to start moving assets out of your name and into a trust. This may help you qualify for Medicaid nursing home benefits in future years. A good elder law attorney or estate planning attorney can help guide you in this endeavor.
You should also consider writing a living will and creating springing power of attorney documents, so that your loved ones or other trusted individuals can manage your finances on your behalf if you become disabled and unable to make these decisions for yourself.
Act Now!
It’s never too early to take serious steps to protect yourself against the risk of Alzheimer’s Disease or other forms of dementia – not to mention the hundreds of other medical issues that may contribute to long-term care risk.
But at some point, it can be too late to take these important measures.
A stroke, a car accident, a slip and fall, and even a doctor visit that results in a diagnosis or medical note can make it difficult or impossible to get coverage.
The best time to prepare yourself financially against these potentially devastating risks is now.
So I encourage you to contact your Personal Benefits Manager and get the ball rolling as soon as you can!
Have a great summer, and I’ll catch you again in a month, with the next edition of the Health and Wealth Newsletter!
To Your Health and Wealth,
Wiley P. Long III
President- ColoHealth
The ColoHealth Health & Wealth Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.
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