Thinking Long Term in the Short Term

Or, buy a policy while you’re young—in your 40s or 50s. Coverage typically costs 40 to 50 percent less then than it does if you buy in your 60s or 70s, Peterson says.

“The earlier you do it, the more options you have, and the greater opportunity you have to lock in at a reasonable rate,” Carter agrees. “I’m paying $400 a year for a policy, and I’m 61.”

Buying early also increases the odds that you will qualify for coverage. Insurers will accept some health conditions, such as arthritis, but it’s difficult to find a policy for a person who already has had a stroke, neurological problems, or other serious health problems.

Some people ask adult children to help pay for a policy. Others ask for it as a benefit at work, which has tax advantages—an employer who offers long-term care insurance can deduct policy premiums. The cost is not counted as part of an employee’s income, and the benefits are not taxable when they are paid. Employers can choose which employees get the benefit, and tailor policies to each one’s needs. And employees can frequently purchase coverage for spouses, parents, or parents-in-law at the employer’s group rates.

“When an employee leaves they pick up the premium and go,” Newman says. But some business owners offer to pay an employee’s premiums as a retention strategy. The firm might even offer to pay the policy in full before the worker retires.

In addition, Minnesotans may take a tax credit equal to 25 percent of their annual premium, up to a maximum of $100. And, if pending legislation is successful, the Long-Term Care Partnership Program will offer residents a way to have their insurance—and government help, too. Already in place in four other states, partnership programs ask participants to buy long-term care insurance to cover three years of nursing care or six years of home care. Once that coverage is exhausted, members can qualify for Medicaid without giving up any of their remaining assets.

Partnership plans might keep the lid on Medicaid costs, while providing higher-quality care.  “Everyone should be insured for long-term care,” Carter says. The partnership program, he hopes, will be what it takes.