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Pennsylvania Long Term Care, State LTC Partnership, Premium Cost & Quotes

Just as no one knows whether they will need home insurance for a theft or fire, no one knows if they’ll need long term care insurance. Statistics from the U.S. Department of Health and Human Sciences however say that up to 70% of Americans aged 65 years will need some kind of long term care as they age. Even more worrying is the prediction that one of 5 seniors in the country will need long term care for at least 5 years. Paying for years and years of long term care at LTC services, housing or assisted living can be extremely expensive. If we use this information, the question is whether you can afford your own long term care if need be, and how willing you are to run the risk.

Pennsylvania is the sixth largest state in the US with a population of over 12.7 million people, almost 2 million of whom are seniors. What’s more, Pennsylvania has one of the largest proportions of residents over the age of 65, second only to Florida. Pennsylvania’s large and growing number of seniors will increasingly need and use Long Term Care services, including care in Nursing Homes, Assisted Living Facilities and Home Health Care.

In 2011 the total Long Term Care expenses in Pennsylvania from Medicaid alone were over $6.8 billion. These expenses will continue to rise as baby boomers in Pennsylvania enter retirement – further straining private and public finances.

Pennsylvania Long Term Care Insurance

Long Term Care insurance is often the best solution to ease the potential economic and emotional strain that LTC can place on your family. We advise our clients to make sure long term care insurance is included in their retirement plan in order to safeguard their savings from the often devastating cost of long term care. Pennsylvania citizens can shop for a good policy from around 17 long term care insurance companies.

Types of Long Term Care Insurance

  • Traditional LTC policies – these plans will provide coverage in a facility of your choosing should you need long term care services. Traditional LTC policies are typically flexible in that policyholders can select the amount of coverage they need, with optional provisions such as inflation protection. While traditional policies were the main thing a few years ago, these have become less popular now due to rampant premium increases. The use-it-or-lose-it approach with these policies has also led many Americans to seek better alternatives.
  • Hybrid policies – hybrid long term care insurance are usually permanent life insurance plans (or annuities) combined with a long term care rider. Most hybrid policies require a single lump sum deposit (let’s say $100,000). In the case you need long term care insurance, the policy will provide coverage. However, if you do not need care, a death benefit will be paid out to your beneficiaries. This means that either way – you get maximum value from the insurance. Hybrid policies tend to be very popular with Pennsylvanians these days.

Will Medicaid pay for Long Term Care in Pennsylvania?

Medicare is a federal health insurance for individuals aged over 65 and younger people with disabilities. This program provides very limited coverage and will not pay for most long term care services. In fact, Medicare does not pay for custodial care – which make up over 90% of all LTC services. Good examples of custodial care include when an individual needs assistance with eating, walking, bathing, dressing, and toileting. 

Can you Pay for Long Term Care Out of Pocket?

Pennsylvanians who are wealthy or have substantial personal assets can self-fund their long term care expenditure. Keep in mind though that Pennsylvania was ranked by Seniorliving.org as the 11th most expensive state in the country for nursing home care. The 2018 average annual cost of a private nursing home in the Keystone State was 121,363. This means if you needed 3 years of long term care, then you’d have to reduce your personal assets with $364,089 ($121,363 x 3). The cost can be even more devastating if you need more years of care. So you’d really need to be worth a lot to be able to foot these bills without wreaking havoc in your personal finances.

Pennsylvania Long Term Care Partnership

Pennsylvania residents are eligible to participate in the Pennsylvania Long-term Care Partnership program, established by the state legislature in 2007. This program helps protect Pennsylvania residents in the event that they outspend their private plans, while also encouraging residents to purchase these plans vs. relying on the overstretched Medicaid system.  In other words, residents of Pennsylvania who take advantage of this program are protected from LTC expenses by both their plan and then, if needed, by Medicaid.

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. These costs are not covered by regular health insurance and only by Medicaid if one qualifies, which can be difficult without exhausting all of your assets.

Through the Pennsylvania Long-term Care Partnership Program, the state is rewarding those who plan ahead and take proactive steps to protect themselves and their assets. Basically, it works like this: the Program offers a dollar-for-dollar asset protection match for those who purchase a Long Term Care Insurance partnership program policy. This enables participants to shield their assets should they need to apply for Medicaid as normally one is required to exhaust all assets before qualifying for Medicaid’s long-term care coverage.

A typical scenario would be: A partnership policyholder uses $200,000 in coverage from their policy and has $200,000 in additional savings and assets. This policyholder is then allowed to exclude up to $200,000 in assets from the Medicaid qualification process thereby protecting these assets from loss. Policies are State-approved and meet consumer protection standards. Only the top quality insurers are included in this partnership program.

Below is a list of companies offering Pennsylvania-approved Long Term Care Insurance Partnership Program policies and link to their website, where available:

  •         Genworth Life Insurance Company
  •         John Hancock Life Insurance Company (U.S.A.)
  •         MedAmerica Insurance Company
  •         Mutual of Omaha Insurance Company

Start planning today for your future and securing all that you’ve worked so hard to achieve for your retirement by purchasing a Long Term Care Insurance policy through Pennsylvania’s Long Term Care Partnership Program.

Pennsylvania Long Term Care Costs

Nursing home (private room) charges in Pennsylvania average at $121,363 per year. With an annual growth rate of 3%, this cost is expected to go up in the coming years. Given that the average long term care event takes about 3 years, you’d need to pay about $364,089 for care. The average cost of a home health aid is $23 per hour. Knowing these costs is important as you plan ahead for your retirement.

Here’s a table of Pennsylvania long term care costs in different regions – based on Genworth’s cost of care survey (2018).

 

 

REGION

 

PRIVATE NURSING HOME ROOM SEMI-PRIVATE NURSING HOME ROOM ADULT DAY HEALTH CARE ASSISTED LIVING FACILITY (PRIVATE ROOM) HOME HEALTH AIDE (AT 44 HOURS WEEKLY)
State Median $121,363 $115,340 $16,900 $45,000 $51,777
Allentown area $163,338

 

$135,050 $16,900 $45,000 $50,336
Altoona $118,625

 

$111,690 $16,640 $45,180 $45,760
Bloomsburg area $99,645 $97,820 $43,200 $43,655
Chambersburg area $132,495 $125,925 $17,680 $54,601 $49,764
East Stroudburg $117,713 $111,325 $41,550 $56,880
Erie $116,618 $103,660 $17,680 $55,050 $51,480
Gettysburg $131,765 $123,370 $15,600 $37,200 $52,052
Harrisburg area $127,385 $118,260 $14,820 $53,010 $50,336
Johnstown $101,835 $97,455 $10,400 $36,427 $45,760
Lancaster $132,130 $125,378 $17,160 $52,200 $52,624
Lebanon $125,013 $116,435 $22,776 $52,290 $53,768
Philadelphia area $146,000 $124,465 $20,020 $63,810  
Pittsburgh $112,785 $104,390 $16,380 $37,800 $53,768
Reading $150,015 $134,503 $15,990 $40,800 $52,349
Scranton area $111,325 $115,158 $17,160 $28,800 $48,048
State college $123,370 $111,143 $10,400 $45,810 $53,768
Williamsport $139,065 $115,705 $38,700 $54,912
York area $139,065 $125,925 $19,240 $49,740 $52,624
Rest of State $93,988 $86,870 $15,600 $36,300 $42,328

 

Pennsylvania Long Term Care Premium Costs

Long term care premium rates in Pennsylvania vary from one insurer to the other. Factors such as the applicant’s age and health status will affect the pricing of premiums. When selecting a plan, you’ll have the flexibility to elect a suitable elimination period, maximum benefit, and inflation protection, which also influence the pricing of premiums.

Here’s a sample calculation of Pennsylvania long term care premium costs for individuals aged 50, 55, 60, and 65.

These sample calculators assume a 90 day elimination period, and selected maximum daily benefits of $200 over a 3 year duration.

→ At Age 50

  • Single Male, age 50, will pay $1,894 annually
  • Single Female, age 50, will pay $2,277
  • Couple, both age 50, will pay a combined annual premium of $3,291

→ At Age 55

  • Single Male, age 55, will pay $1,967 annually
  • Single Female, age 55, will pay $2,381
  • Couple, both age 55, will pay a combined annual premium of $3,308

→ At Age 60

  • Single Male, age 60, will pay $2,070 annually
  • Single Female, age 60, will pay $2,963 per year
  • Couple, both age 60, will pay a combined annual premium of $3,390

→ At Age 65

  • Single Male, age 65, will pay $2,627 annually
  • Single Female, age 65, will pay $3,921 each year
  • Couple, both age 65, will pay a combined annual premium of $4,452

Keep in mind that the precise cost will depend on the specific policy you purchase, and the features you have elected. But as you’ll notice from the calculations above, premium rates increase with age. Couples can also land substantial marriage discounts by purchasing the policy jointly.

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