North Carolina Long Term Care, State LTC Partnership, Premiums & Insurance Quotes
Planning ahead for long term care is important because 70% of Americans will need some kind of long term care services after they reach 65 years. Most Americans first know about LTC after they or a loved one needs care. Then, their options are limited by an immediate need for services, lack of information, and insufficient resources. This ultimately puts families through a lot of economic and emotional stress. A good solution to protect your resources and peace of mind is to include long term care in their retirement strategy.
North Carolina is the 9th most populous state in the US, with over 10.3 million residents. More than 1.6 million citizens from the Tar Heel State are over 65 years old. This has led to an increase in demand for long term care services such as home health care, as well as care in nursing homes and assisted living facilities. Expenditure for long term care in North Carolina runs into billions of dollars – putting both private finances and state resources under pressure.
Long Term Care Awareness
North Carolina is becoming a haven for retirees and ‘halfbacks’ who are settling halfway between the Northeast and Florida. With a population that’s rapidly aging, awareness of the need for Long Term Care Insurance remains low. Long Term Care Insurance covers the cost of services such as nursing homes, in-home care and assisted-living care when one is unable to care for themselves and is not covered by regular health insurance and only by Medicaid if one qualifies, which can be difficult without exhausting all of your assets.
Genworth estimates that 70% of Americans have made no plans for long-term care and many were not even aware of this kind of insurance and what it covers. And, given that the Department of Health and Human Services estimates that around 66% of all Americans 65+ will need Long Term Care before they die, this does, indeed, create a problem will have to be dealt with. Many Americans – North Carolinians included – are now at risk of having to exhaust their nest egg or rely on their children or other relatives to care for them in retirement should they become unable to care for themselves.
How to Pay for Long Term Care
North Carolinians have various options to pay for long term care services, depending on their financial capabilities as well as personal preferences.
- Personal finances
If you have substantial income or assets, then you may choose to pay for your own long term care out of pocket. Keep in mind that a private nursing home room costs $92,528 per year, notwithstanding a 4% annual growth rate. The average long term care duration is 3 years in North Carolina. That means you’d need to pay at least $277,584 ($92,528 x 3) through a long term care event. While self-funding your care may still be a reasonable option depending on your financial status, this kind of money is out of reach for most North Carolinians.
Some North Carolinians may qualify for Medicaid, a joint Federal and State program that assists low income individuals and families. Medicaid may pay for some types of LTC for low income citizens who meet stringent eligibility requirements. In North Carolina, you’d need to nearly exhaust all your assets before Medicaid can kick in to help pay for long term care. The state’s Medicaid asset limit is $2,000.
Insurance is often the best option to plan for your future long term care needs. There are two main types of long term care insurance available:
→ Traditional long term care insurance – traditional LTC insurance provides quality long term care coverage in exchange for annual premiums. This insurance allows you to protect your assets and secure your peace of mind knowing that should you need long term care – you’ll receive it in a facility of your choice. A major drawback of this kind of insurance is unpredictable premium increases, which has made it less popular in recent years.
→ Hybrid long term care insurance – hybrid LTC is typically a combination of permanent life insurance or an annuity with a long term care rider. Most hybrid policies require that you make a single lump sum premium deposit. Should you need long term care, then the policy will provide daily or weekly benefit payouts. In the case you do not need long term care, the hybrid insurance will pay out a death benefit to your beneficiaries. This approach basically eliminates the use-it-or-lose-it scenario evident in traditional LTC insurance.
There are around 17 great Long Term Care Insurance companies that are available to residents in North Carolina which can help protect personal savings in the event of needing Long Term Care services. With the choice between this many companies, along with the Partnership program, North Carolinians have many options for securing their retirement and Long Term Care needs.
Most Popular Long Term Care Companies in North Carolina
- Mutual of Omaha
- Mass Mutual
- New York Life
- John Hancock
North Carolina Long Term Care Partnership
→ What is a partnership policy?
A Partnership LTC Program is basically a collaboration between the State and private insurers selling long term care insurance in that state. Partnership policies must meet special requirements that vary from one state to the other. Most states require that qualified policies provide comprehensive benefits, certain consumer protections, and be tax qualified. The goal of a partnership policy is to make the purchase of comprehensive long-term care insurance meaningful by linking these special policies with Medicaid for those who need continued care. The main difference between a partnership certified policy and a regular LTC policy is the amount and type of inflation protection provided.
Implemented in January 2001 – the North Carolina Long Term Care Partnership Program provides the state’s residents with an additional option for affordable, quality, LTC insurance. The program aims to encourage North Carolinians to take charge of their long term care future by purchasing special insurance with important consumer protection.
Basically, it works like this: If your Partnership policy is worth (let’s say) $200,000, and you use that amount of benefits but continue to need care, you can apply for Medicaid coverage while protecting your assets. During your Medicaid application, then $200,000 worth of your personal assets – such as savings, family-owned businesses or farms – would be exempted from the qualification requirements . Further, Medicaid would not recover that $200,000 from your estate’s resources after you die.
Partnership Policies in North Carolina give consumers the option to exempt a portion of their assets from Medicaid spend down requirements while protecting the same amount at estate recovery.
→ Highlights and requirements of the Partnership Program include:
- be issued to an individual on or after January 1, 2011;
- be a tax-qualified policy under Section 7702(B)(b) of the Internal Revenue Code of 1986;
- meet stringent consumer protection standards; and meet the following inflation requirements: For ages 60 or younger � provides compound annual inflation protection For ages 61 through 75 – provides some level of inflation protection For ages 76 and older, no purchase of inflation protection is required
The “inflation” requirements are crucial here. Inflation protection ensures that your policy will pay out in tomorrow’s dollars and that your covered for the care you need.
Residents of North Carolina are able to participate in the North Carolina Long Term Care Insurance Partnership Program via a number of policy options that meet certain State-mandated criteria. You can start planning today for your future long-term care needs and securing all that you’ve worked so hard to achieve for your retirement by purchasing a Long Term Care Insurance policy.
North Carolina Long Term Care Cost
It’s important to know the cost of long term care services in North Carolina so you understand how much insurance is needed. Here’s a table of LTC costs in different regions of the Tar Heel State based on Genworth’s 2018 cost of long term care survey.
|Annual Cost of Care in North Carolina (2018)|
|REGION||PRIVATE NURSING HOME ROOM||SEMI-PRIVATE NURSING HOME ROOM||ADULT DAY HEALTH CARE||ASSISTED FACILITY (PRIVATE ROOM)||HOME HEALTH AIDE (44 HOURS WEEKLY)|
|Rest Of State||$86,140||$78,110||$13,000||$39,600||$38,896|
North Carolina Long Term Care Premium Costs
→ How much does long term care insurance cost in North Carolina?
The cost of long term care insurance premiums in North Carolina depends on your health history and age at the time when you purchase the insurance. Premium rates tend to be lower when you are young and healthy. Other factors that may influence the cost of LTC premiums in the Tar Heel State include:
- Benefit period – this refers to the total amount of time (in years) throughout which the insurance policy will pay out benefits.
- Daily maximum benefit – refers to the maximum dollar amount an LTC policy will reimburse you for each day when you receive care.
- Elimination period – an elimination period is the length of time between when you start receiving care and when the policy starts paying for that care.
- Inflation protection – when selected, this policy feature ensures that the benefit dollars you receive should you need long term care in the future are adjusted for inflation.
→ North Carolina sample Long Term Care premium calculations
These sample premium calculations assume that the policy applicant selects an elimination period of 90 days, a daily maximum benefit of $200, and a benefit period of 3 years.
→ At Age 50
- Single Male, Age 50, pays $1894 annually
- Single Female, Age 50, will pay $2,277
- Couple, each age 50, pays a combined $3,291 annually
→ At Age 55
- Single Male, Age 55, pays $1,967 annually
- Single Female, Age 55, will pay $2,381
- Couple, each age 55, pays a combined $3,308 annually
→ At Age 60
- Single Male, Age 60, pays $2,070 annually
- Single Female, Age 60, will pay $2,963
- Couple, each age 60, pays a combined $3,390 annually
→ At Age 65
- Single Male, Age 65, pays $2,627 annually
- Single Female, Age 65, will pay $3,921
- Couple, each age 65, pays a combined $4,453 annually
Note that the premium costs for long term care insurance go up with age. Couples can also attain significant discounts by purchasing the policy jointly.