November 1, 2004
A Cure For Health Concerns Insurance
They’re not like many thirty-somethings, but Vickie Seabon-Moore and her husband, Kenneth, saw the light three years ago when they decided to sign up for long-term care insurance. They signed up shortly after Seabon-Moore’s mother died, after seeing her illness drain her resources and then pose a problem for her children.
In 1999, Seabon-Moore’s mother developed acute leukemia at age 69 and was bedridden. She needed help at home, but the family had no insurance to cover the costs of a home attendant or a nursing home, services that would have totaled $40,000 a year or more. “There were six of us, but I was the only one who could really devote time,” Seabon-Moore says. “It was a strain. I essentially sat out a year of work until she passed in 2000, so I saw firsthand how costly care could be.”
During that experience, Seabon-Moore, 35, realized that she needed backup in case she was also stricken with the disease. Now a financial consultant for a bank in Rochester, New York, she wanted to protect Kenneth, 41, and their three children, Eric, 8, Katie, 4, and Brennen, 1. “I want my kids to be free to start their own families and live their lives,” she says. “And at this age, coverage comes to about $75 a month.” Seabon-Moore settled on coverage that provides $300 a day for a home attendant or nursing home stay. She also opted to have her payout keep up with inflation.
Concerns like Seabon-Moore’s affect millions of families every day. According to the 2000 U.S. Census, the number of people 65 and older is expected to mushroom from 35 million in 2002 to 70 million by 2030. This growing population is also expected to live longer, making it more likely that, at some point after age 65, they will require some form of additional healthcare assistance. That’s where long-term health insurance can help.
SURVIVING WITHOUT COVERAGE
Without insurance, trying to pay the cost of a home attendant or nursing facility — whether for a parent, older relative, or yourself — can wipe out your savings and any money you plan to leave your heirs. That’s why long-term health insurance should be a major consideration when crafting your overall financial plan. According to AARP, a consumer group that represents the interests of senior citizens, the national average cost of a nursing home is $4,654 a month, or about $56,000 a year — expenditures that could be saved with long-term care coverage. “In a state such as New York, that number can easily go over $100,000 a year,” says Enid Kassner, senior policy adviser for AARP. The average outlays for home care services are equally steep, averaging $37 an hour for a licensed nurse and $18 an hour for a home health aide.
While there may be some confusion over exactly what is covered by long-term health insurance policies, the need for them is undeniable as we approach old age. Consumers should understand that policies don’t pay the costs of medical treatments or medications. Long-term coverage