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Program Offers Coverage for Nursing Home Care

The following is an excerpt from an article which appeared in the May 15, 1998 edition of The Fort Collins Coloradoan:

Program Offers Coverage for Nursing Home Care

By Sonja Bisbee
Be careful

Dan Wellman, administrator at Spring Creek Health Care Center, 1000 E. Stuart St., offered the following tips about long-term care insurance: 

Don't go broke paying for it. Only pursue it if you have expendable income and an estate to protect. The younger you are, the lower your premiums will be. Find a plan that meets your anticipated needs. Read the fine print carefully for restrictions. 

For details on the new long-term care options available through Public Employees' Retirement Association of Colorado, call (888) PERA-LTC. 

Enrollment runs through June 30. 

Robert didn't know how expensive nursing-home care was until his mother needed it. 

Medicare paid a little, then her long-term care insurance kicked in. 

"I was very aware of the value of that," said the now 67-year-old Fort Collins man, who watched for a year and a half as his mother's nursing home neighbors depleted their life savings. 

Robert, who asked to remain anonymous, purchased similar insurance for himself and his wife last month. 

The couple will pay $400 a month for the next 10 years and get lifetime coverage for nursing-home care, and other services needed by people no longer able to live independently. 

Though not for everyone, according to one local expert, the purchase of long-term care insurance is a growing trend among the aging population. 

Public Employees' Retirement Association of Colorado is now offering the option to its 22,000-plus eligible members in Larimer and Weld counties. 

People are living longer but in poorer health, said Sam Kaplan, founder and chair of U.S. Care, the California-based company providing services for PERA. 

More than 40 percent of people who reach age 65 will be unable to care for themselves at some point, the New England Journal of Medicine has reported. 

And the 65-plus population is growing. The percentage of Americans in that group has more than tripled since 1990. 

Many people think Medicare or health insurance will pay long-term care costs, which in Colorado average from $42,000 a year for a nursing home to $12,000 annually for home-health care. But that's not the case, Kaplan said. 

"There's a big black hole," he said. 

About half the costs of long-term care come out of people's pockets—until patients deplete all their resources and become eligible for Medicaid, Kaplan said. 

Members of PERA—including employees and retirees of state government, public universities, school districts, the judicial system, municipalities, and public health departments—can now enroll in an insurance program to cover these costs. 

Premiums vary with age, and lifetime benefits range from $100,000 to $350,000 in three different plans that include nursing home care, home-health care, adult day care, assisted living facilities, hospice care and respite care. 

Dan Wellman, administrator at Spring Creek health Care Center at 1000 E. Stuart St., said he is seeing a growing interest in such plans, but only about 15 percent of his clients have them. 

Long-term care coverage works well for people who have expendable incomes and can easily afford the premiums, Wellman said. 

But he urged people not to "go broke" now paying the premiums. They can always fall back on Medicaid if they deplete their limited resources later on. 

He also encouraged people to "read the fine print" and understand all restrictions before enrolling in a plan. 

About 125 insurance companies like U.S. Care offer similar plans across the country. U.S. Care covers 126,000 subscribers including employees of Hewlett-Packard. 

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