New long-term care plan helps families prepare for future

Parents who always intended to leave their property and assets to their children might have to put those plans on hold if they end up needing long-term health care.

Parents who always intended to leave their property and assets to their children might have to put those plans on hold if they end up needing long-term health care.

South Dakota's new Long-Term Care Partnership Program provides a way around the dilemma of spending down or transferring assets to pay for long-term care. The state-approved and promoted plan forms a partnership between Medicaid and private long-term care insurers.

The new plan offers consumers options for long-term plans that pay for healthcare not covered by a garden-variety healthcare plan.

"Long-term healthcare is getting a lot of attention lately," said Don Grimes, a long-term care educator hired by the Department of Social Services to explain the new program .

Nearly 60 persons attended a recent informational meeting on the new plan at Avera Queen of Peace Hospital in Mitchell. Grimes and others will be on the road statewide through May explaining the new plan and its options.


The education schedule, plan basics, and the names of participating private insurers are posted on the state Web site at .

"There's a two-in-five chance we'll need long-term health care," said Grimes.

The average annual cost for long-term healthcare in South Dakota is $50,000, an amount that can quickly drain down savings, drive uninsured families to Medicaid and eventually strip away personal assets.

If long-term health care creates images of enfeebled centenarians in nursing homes, think again.

"About half the people who require long-term healthcare today are of working age," said Grimes.

Long-term care is occasionally required by the very young, said Grimes, who noted that 92 percent of women with lupus -- a crippling auto-immune disease -- are between the ages of 10 and 25.

"Long-term care is a huge issue in agricultural states," said Grimes, "where there are many families who are land-rich and cash poor."

In South Dakota, 59 percent of long-term healthcare costs are paid by Medicaid, an amount that's considerably higher than the national average of 44 percent.


Often, those families don't have long-term care insurance and haven't provided for the transfer of assets to family members well in advance of their illness.

A few other facts:

n Traditional healthcare and Medicare health insurance don't pay for long-term care, only for regular health treatment and recovery.

n Long-term care provides help for people who need continuing help with bathing, dressing, eating, toileting, continence and transferring from a bed to a chair. An inability to perform several of those tasks independently for 90 days may qualify a person for Medicaid and long-term care.

n The 2007 average daily rate for a semi-private room in a South Dakota nursing home was $137. The average stay is 2½ years.

n The new plan provides asset protection. If all funds in a long-term plan are paid out, personal assets would be protected.

That's not the case for those who are uninsured.

n Long-term plans available through the partnership will vary from provider to provider, said Grimes, so it pays to shop carefully.


n For a person younger than 61, the long-term policy provides annual inflation protection.

n About 10 insurance companies are authorized to sell individual long-term care policies in-state; only three companies are qualified as group carriers.

Many people who investigate long-term health care plans are told to wait until age 65 before enrolling, said Grimes.

He doesn't believe that's wise since the plan is less expensive the younger a person may be.

"If you wait until age 65 the plan becomes more expensive and there's a possibility you may not get it."

The latter might occur if some health emergency made a person uninsurable, he said.

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