Boomer Grandpa: To pay or not to pay — for long-term care insurance
The crowd filed in. It was not exactly a hip-looking crowd — more on the distinguished side. I arrived early enough that a few snacks were left from the previous meeting. I was able to snag a piece of banana bread — nice.
As we entered the meeting room, each of us got a nice blue folder filled with information we need to know but really don't want to know. The folder had nice photos of smiling people.
I was among mostly Mayo Clinic employees who were there for a benefits class regarding Long-Term Care Insurance (LTC). Ugh. This is where our generation is at in our life. Compelled to plan and gaze to our future, wondering if we will someday need to pay someone to feed us soup.
Some of us have seen what our parents have gone through or are still going through. These experiences have shaped how we look to and plan for our not-so-golden years.
Dreams vs. reality
The sentiment is none of us want to enter the world of long-term care. The reality, for those of us who are married or have a partner in life, is that the probability is extremely high that one of us is going to need this type of care in some fashion.
This LTC information is a big deal for Mayo Clinic employees who have already enrolled in long-term care plans and for those who have not, but may consider it in the future. Mayo has been informed that CNA Insurance, which has provided Mayo employees with this insurance, is bailing and that they will no longer accept new participants into their Long-Term Care plans effective Feb. 1.
The presenter for the benefits class I attended was Brad Winnekins from Legacy Services. His company has been selected to assist Mayo Clinic employees in purchasing LTC insurance from now on, or in changing from CNA if that is their choice.
The bottom line for Mayo Clinic employees is that CNA is required to honor the contracts they have with them. However, as CNA jettisons its affiliation with Mayo, I would bet money their premiums will rise big time.
Many will struggle with what they are to do with all this. They can keep their current policy, look for something different, or drop out.
According to Brad, insurance companies did not do a decent job of figuring out what these long-term care premium costs should be. Insurance companies are losing money, and because of that some are getting out of that segment of the insurance business. Because of this, the opinion is that CNA officials weren't there because they couldn't care less if the Mayo employees keep their current plans/contracts. Maybe not a good sign for customer service in the future.
It must be bad if a company would dump a contract with Mayo Clinic — that is a lot of business they threw out the Gonda window. I decided to meet with a friend of mine who is in this business.
Gerard Goulet is a long-term care specialist who provides detailed education on the topic by teaching many local area Community Ed classes. The guy knows his stuff. Gerard provided me with enough documents and articles to cause a back injury.
He was kind enough to spend time talking to me about this issue. He showed me projections of what long-term care costs are projected to be in 20 years. It was enough to make me want to cover my ears and say, "La, la, la, la, I can't hear you."
He did make a statement that got my attention. He indicated those who need long-term care will be affected the least, but their family will be affected the most.
Experts like Gerard or Brad can help guide any of us through this process. There is a great deal to consider, details and options of coverage. A bottom line is how much are you willing to pay for a policy that may offset future long-term costs and help you protect part of your assets.
Gerard has also informed me that hybrid life/long-term care plans are now gaining popularity. These pay out a death benefit if you don't use the policy for your long-term care needs. Many of these plans will refund your premium should you decide to cancel the policy, but as you can imagine, it's not cheap.
If you have a few million bucks salted away, this need may not be on your radar. Our children will have to make a decision about long-term care insurance as well. Because of the cost, I speculate long-term care insurance may become out of reach for low-income and middle class families.
In the title of this column, I reworded the famous scene from Shakespeare's play "Hamlet." When the despondent Prince Hamlet began his soliloquy, "To be or not to be," he was lamenting the pains and unfairness of life, but acknowledges the alternative might be worse.
Seems the Prince was summing up the conundrum of long-term care insurance.