Say Uncle (Sam)!
Posted by Dorothy at 8/22/2009 12:25 PM 
Categories: Basics
Tags: employee benefits long-term care insurance Health insurance long term care insurance Health insurance and more long-term care LTC Insurance LTC
Categories: Basics
Tags: employee benefits long-term care insurance Health insurance long term care insurance Health insurance and more long-term care LTC Insurance LTC
Are you relying on the federal government’s program to cover your living expenses in the event you become disabled?
Probably not, Social Security’s Disability Program is notorious for its long wait for benefits and its stringent qualification requirements. Even if you meet its definition of disability, benefits aren’t payable until the fifth full month after disability begins. The Question and Answer page on Disability Benefits states “It can take a long time to process an application for disability benefits (three to five months).”
Because Social Security Disability can’t be counted on for comprehensive income protection, employers often sponsor and sometimes pay for private disability coverage. Some self-employed people, and even some employees who have coverage at work, choose to purchase private individual disability policies to help replace their income if they were to become disabled. These plans, combined with social security disability program benefits, can provide peace of mind in case the unthinkable happens and you can no longer work.
Not to change the subject, but are you relying on the federal government’s program to provide you with a comfortable retirement income?
I hope not, since, as the government itself states, Social Security Retirement Income will replace only about 40% of your income if you have average earnings, and the “percentage is lower for people in the upper income brackets.” On the same web page, the program notes “You'll need to supplement your benefits with a pension, savings or investments.”
Let’s recap:
We cannot rely on government programs to provide for a comfortable quality of life if we become disabled, or when we retire.
So, why do many of us expect a government solution when it comes to long-term care?
We don’t solely rely on the government for disability protection or for retirement income, but ironically many of us do expect to rely on the government when we become disabled in retirement!
As of now, there is no federal government program financed by payroll deductions, like Social Security, that provides a long-term care benefit. The only federal program that covers any long-term care is Medicaid. You know Medicaid; it pays for the kind of care you least desire, such as nursing-home care, and requires that you be poor to qualify.
The Health Care Reform proposal currently making its way through the Senate includes a groundbreaking provision for a government long-term care program. Premiums would be paid for by workers. However, the coverage is designed to provide an average daily benefit of just $50 to allow people to bring services into their homes. This coverage would be available after you have paid premiums for five years.
The proposal making its way through the House of Representatives includes no such new program for a federal long-term care program.
From experience with Social Security disability and retirement income benefits, we know that even if the proposal were to become law, most of us wouldn’t want to count on it. We’d supplement it with private insurance and our own nest eggs.
Have you ever heard a baby boomer say that they are not going to worry about long-term care planning? That, because there are so many of us, the government will have to come up with a plan to fix the problem?
When you take a look at all the other solutions that government has offered us, there’s only one logical response: “Don’t count on it!”
Dorothy McMahon, president of McMahon and Associates in Bloomfield Hills, is a specialist offering “Straight Talk about Long-Term Care Insurance.” She has brought her program to professional associations, family support groups, meetings, and conferences. Contact her at (248) 844-9787 or LTCINSUSA@AOL.COM and visit www.mcmahonltcins.com.
Probably not, Social Security’s Disability Program is notorious for its long wait for benefits and its stringent qualification requirements. Even if you meet its definition of disability, benefits aren’t payable until the fifth full month after disability begins. The Question and Answer page on Disability Benefits states “It can take a long time to process an application for disability benefits (three to five months).”
Because Social Security Disability can’t be counted on for comprehensive income protection, employers often sponsor and sometimes pay for private disability coverage. Some self-employed people, and even some employees who have coverage at work, choose to purchase private individual disability policies to help replace their income if they were to become disabled. These plans, combined with social security disability program benefits, can provide peace of mind in case the unthinkable happens and you can no longer work.
Not to change the subject, but are you relying on the federal government’s program to provide you with a comfortable retirement income?
I hope not, since, as the government itself states, Social Security Retirement Income will replace only about 40% of your income if you have average earnings, and the “percentage is lower for people in the upper income brackets.” On the same web page, the program notes “You'll need to supplement your benefits with a pension, savings or investments.”
Let’s recap:
We cannot rely on government programs to provide for a comfortable quality of life if we become disabled, or when we retire.
So, why do many of us expect a government solution when it comes to long-term care?
We don’t solely rely on the government for disability protection or for retirement income, but ironically many of us do expect to rely on the government when we become disabled in retirement!
As of now, there is no federal government program financed by payroll deductions, like Social Security, that provides a long-term care benefit. The only federal program that covers any long-term care is Medicaid. You know Medicaid; it pays for the kind of care you least desire, such as nursing-home care, and requires that you be poor to qualify.
The Health Care Reform proposal currently making its way through the Senate includes a groundbreaking provision for a government long-term care program. Premiums would be paid for by workers. However, the coverage is designed to provide an average daily benefit of just $50 to allow people to bring services into their homes. This coverage would be available after you have paid premiums for five years.
The proposal making its way through the House of Representatives includes no such new program for a federal long-term care program.
From experience with Social Security disability and retirement income benefits, we know that even if the proposal were to become law, most of us wouldn’t want to count on it. We’d supplement it with private insurance and our own nest eggs.
Have you ever heard a baby boomer say that they are not going to worry about long-term care planning? That, because there are so many of us, the government will have to come up with a plan to fix the problem?
When you take a look at all the other solutions that government has offered us, there’s only one logical response: “Don’t count on it!”
Dorothy McMahon, president of McMahon and Associates in Bloomfield Hills, is a specialist offering “Straight Talk about Long-Term Care Insurance.” She has brought her program to professional associations, family support groups, meetings, and conferences. Contact her at (248) 844-9787 or LTCINSUSA@AOL.COM and visit www.mcmahonltcins.com.
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