Earlier this week a leading "think tank", the Urban Institute, released a study proposing a new long-term care program.  A senior fellow at the Institute, Howard Gleckman, wrote, "Can we build better long-term care insurance? The answer is yes, according to two important new studies."

"Unfortunately, the proposed program would cost a 65-year old about 60% more than what long-term care insurance costs today," explained Scott Olson, co-founder of LTCShop.com.  One of the proposed plans would pay for two years of benefits, after a 90-day Elimination Period.  The plan would also include inflation protection.  Without any government subsidies, the study estimated a 65-year old would have to pay $3,680 per year for this plan.

A 65-year old male, in average health, could get the same benefits today for only $1,541 per year.  "That's less than half of what the proposed program would cost," Olson continued.  Ironically, the study states that "relatively few people purchase private long-term care insurance because of high premiums."  Yet for all age groups the premiums proposed in this study would cost, on average, 64% more than long-term care insurance costs now.

Fortunately, 43 states in cooperation with the federal government have already launched a "Public/Private" Partnership for Long-Term Care.  To help the middle-class plan for long-term care these states have approved for purchase a special type of insurance called "Long-Term Care Partnership Policies".

"A Long-Term Care Partnership Policy can protect most, if not all, of your assets from Medicaid spend-down and Medicaid estate-recovery," Olson explained. A married couple both age 61, in average health, could share a Long-Term Care Partnership Policy with $250,000 of benefits.  Their premium would be less than $100 per month per spouse.  If they used all $250,000 in the policy, they could apply for Medicaid benefits and protect $250,000 of their countable assets from Medicaid.  

If the couple wants to protect more assets they can buy more benefits for a higher premium.  If the couple has less assets they can buy less benefits for a lower premium.  The middle-class can target how much coverage they need based upon how much of their assets they want to protect from Medicaid.  In all cases, a lifetime of savings and hard work can be protected through these Long-Term Care Partnership Programs.

"Clearly, the Long-Term Care Partnership Programs are the most equitable solution to the long-term care crisis facing our nation", Olson concluded.