Michigan Long Term Care Cost, State LTC Partnership, Insurance Premiums & Quotes
According to the US Department of Health and Human Sciences, two thirds of Americans will need some kind of long term care after they reach 65 years. Many people have seen first-hand as their loved ones struggled to pay for long term care services during one of the most frail periods of their life. Planning ahead is instrumental because it protects you and your loved ones from the financial and emotional burden associated with long term care.
Michigan is the 10th most populous state in the country with nearly 10 million residents. The Great Lakes State has a high population of seniors with 16.2% of its citizens being 65 years and above (according to data from the US Census Bureau). This large number of aging residents has translated to ever-increasing demand for long term care services at home, as well as in nursing homes and assisted living facilities. If you’re looking to take charge of your retirement future, this page tells you everything you need about long term care in this great state of Michigan.
How to pay for Long Term Care
LTC Tree recommends that you plan for Long Term Care preferably before you become a senior citizen – in order to avoid property loss and emotional distress in the future. You have several options to pay for long term care.
Residents who are of good financial standing can opt to pay for their own life care with personal funds. This would mean having to sell assets such as your home and boats to pay for LTC of your choice. Keep in mind that a private nursing home room will cost you at least $109,500 annually in Michigan, notwithstanding a 3% annual growth rate. Given that the average duration of a long term care event is 3 years, that adds up to $328,500 ($109,500 x 3). Needless to say, this kind of money is out of reach for many Michiganians.
Long Term Care Insurance
Insurance is an effective way to protect yourself from the devastating cost of long term care. There are basically two types of LTC insurance available:
- Traditional Long Term Care Insurance – this is the typical policy whereby you contribute annual premiums in exchange for long term care coverage. A traditional policy protects your assets and offers flexibility to choose the kind of LTC facility you’d like. This model of insurance has lost touch in the industry though because of the unpredictably increasing premiums. The use-it-or-lose-it approach with traditional LTC insurance is also not very popular with many Michiganians.
- Hybrid Long Term Care Insurance – hybrid LTC Insurance happens to be a better option because it offers a win-win outcome. Should you need long term care, then the policy will pay out benefits. In the case you do not need long term care, your plan will pay out a death benefit to your beneficiaries. Most hybrid long term care policies require that you make a single lump sum deposit in order to purchase the coverage.
Medicaid is a federal and state program that assists citizens with low income or little to no assets to pay for medical bills and services. People seeking help from Medicaid undergo thorough scrutiny to see if they are really struggling to accommodate their medical expenses. The program has various limits and many rules that are used to qualify beneficiaries.
If you receive Supplemental Security Income (SSI), you automatically qualify to receive Medicaid. If you are blind, disabled, or elderly but do not receive SSI, your income must be less than the Federal Poverty Level by 138% to benefit from Medicaid. In Michigan, residents who are blind, 65 years or older, or disabled can spend down their income using their medical bills so as to qualify for Medicaid. You are strictly required to drain your assets to $2,000 or less in order to be a beneficiary. Medicaid will also look into at least 60 months of your financial history to examine how much you had and how you spent your assets.
Most Popular Long Term Care Companies in Michigan
- Mutual of Omaha
- Mass Mutual
- John Hancock
- New York Life
Michigan Long Term Care Partnership
Michigan’s Long Term Care Partnership program was established by the Michigan state legislature in 1995. The program helps to protect Michigan residents in the event that they outspend their personal assets as they seek long term care services. The Partnership is a collaboration that involves three parties: the state government, state residents, and private insurance companies.
The partnership policy works as such: If your Partnership certified LTC policy paid out $200,000 in benefits, Michigan’s Medicaid program allows you to keep (save) $200,000 in assets as well as qualify for Medicaid assistance. The amount of assets you are able to protect under the Partnership includes any assets your spouse is permitted to hold back. Partnership policies have a mandatory inflation protection feature that makes sure the benefits you receive are adjusted for inflation.
The LTC Tree team understands the importance of being keen when shopping for a long term care insurance policy. These policies come in a variety of options and it’s important to find one that suits your budget and preferences. Our team has helped countless Michiganians find the right plan to secure their future from long term care expenses.
Michigan Long Term Care Cost
It’s important to know the cost of long term care in Michigan so you can plan ahead. The table below shows the cost of care in various areas based on data collected by Genworth financial.
|2018 Annual Cost of Care in Michigan|
|REGION||PRIVATE NURSING HOME ROOM||SEMI-PRIVATE NURSING HOME ROOM||ADULT DAY HEALTH CARE||ASSISTED FACILITY (PRIVATE ROOM)||HOME HEALTH AIDE (AT 44 HOURS WEEKLY)|
|Grand Rapids area||$123,735||$109,135||$24,700||$50,400||$52,624|
|Rest Of State||$105,850||$101,835||$15,600||$37,200||$52,624|
Michigan Long Term Care Premium Cost
The cost of long term care premiums can vary greatly based on the applicant’s gender, age, and even marital status. Policies tend to be cheaper when you are younger and healthy. Women tend to pay more than male counterparts of the same age and health, and married couples can secure massive discounts by purchasing a long term care plan jointly.
→ Sample calculations – Michigan long term care insurance premiums
These sample premium calculations assume that the applicant selects an elimination period of 90 days, a daily maximum benefit of $200, and a benefit period of 3 years.