In their mid-20s, at a time when Todd and Daydra Bauman’s biggest worry should have been paying off student loan debt or saving up for their first home, the couple faced the unthinkable. A rare illness debilitated the 27-year-old Daydra.
“A normal body can detect what’s good and what’s bad,” said Todd Bauman. “Her body couldn’t.”
Because of her condition, Daydra required assistance as her sight and mobility suffered. Her husband tried to help as much as he could, but he needed work so the couple could stay ahead of the every-mounting piles of medical bills.
“We had to pay somebody to be with her at home,” Todd explained.
Thankfully, Daydra regained her strength within a year and was able to manage most daily tasks on her own. But the couple hasn’t forgotten the financial and emotional burden they bore during that time.
Todd Bauman, now a State Farm agent in Walla Walla, often relays the experience to clients considering purchasing long-term care insurance.
Long-term care insurance pays for care not generally covered by regular health insurance or Medicare.
According to the U.S. Department of Health and Human Services, a 65-year-old today has a 70 percent chance of needing some type of long-term care services and support in their remaining years. And with health care costs outpacing inflation, Bauman and Kennewick State Farm agent, Scott Smith, agree that it’s an option most people should consider.
“Most of us hope we’ll die in our sleep when we’re 90 and never need it,” said Smith, “But many people do, and the alternative is that you don’t have it, and you go the state route. The state is going to make sure all the assets you have are used. They’re not going to let you keep a million in the bank. You’ll have to show you’ve depleted what you have.”
Long-term care insurance can protect a person from losing their home, assets and investments, and allow them to pass something on to their children.
On average, a person will use two to three years of long-term care in their lives. Depending on the amount of care they need, a $250,000 policy can disappear quickly. If a person requires more care, they might have to apply for Medicaid once their benefits run out.
Unless it’s a Washington Partnership for Long-Term Care policy, the state would require the policyholder’s assets, including their home, to be sold to pay for services.
Partnership program policies offer the same benefits and options as non-partnership policies for roughly the same cost; however, under a partnership policy, people can keep assets equivalent to the policy’s maximum coverage. Another difference is that partnership policies also include inflation protection. If you buy a partnership policy in Washington, it will help protect your assets in other states, too. Washington’s agreement with certain states allows policyholders to move to another reciprocity state and receive dollar-for-dollar asset protection.