Choosing the Right Path:  Personal Long-Term Care Planning vs. Proposed State-Based Plans 

Long-Term Care (LTC) becomes a critical consideration for your clients near or in retirement as it includes a range of services to meet health and personal care needs - excluded by Medicare - when one is chronically ill or can no longer perform certain Activities of Daily Living (ADLs). 


As that segment of the population grows, many states have proposed or are considering state-level, taxpayer-funded LTC programs to address the rising demand for care services, and those states believe these initiatives will provide a safety net and that doing something is better than doing nothing.  However, advisors and their clients should be wary of any government-controlled LTC plan and whether it will fit or be a good option from the perspective of personal financial planning.


From an advisory perspective, regardless of where your client lives or the potential implementation of a state-based LTC Plan, consumer-oriented, advisor-driven LTC Planning may be the best path forward based on the following factors.....


Personalized Coverage...

One of the likely and significant drawbacks of any state-proposed government-controlled LTC program is a cookie-cutter approach, where options are limited, benefits are capped, and there is little control over desired or available LTC services.  In contrast, individual LTC planning allows you to help a client customize a plan to align with their retirement, estate, and financial planning and ensure the desired care is what they receive when the need arises. 


If explained adequately, this should be reason enough for most of your clients....


Maintain Control & Choice...

Taking personalization a step further.....Your clients work with you because they DON'T want to rely solely on the government for retirement income (Social Security), healthcare (ACA Plans), or estate planning (probate), and they have or will give up most of their healthcare choices with Medicare.  When it comes to Medicare-excluded LTC, most clients will want to decide the type of care received, how and when they receive it, who provides it, or the setting in which care is delivered. 


Furthermore, where you have an advisory relationship with clients, possibly even a fiduciary duty, the politicians and bureaucrats proposing or running various state-based,  government-controlled LTC programs do not!   They don't care that insufficient or inadequate state-based plans might create a false sense of security and that many of those requiring care will still have significant out-of-pocket expenses, go on to deplete their savings, or burden family and loved ones.  


Truth be told, most politicians and bureaucrats don't believe your clients should be given a choice or that they are even capable of making those decisions!   Advisor-driven LTC planning takes the government out of the equation and keeps choice and control in your client's hands.


Flexibility and Independence...

State-run, government-controlled LTC programs could have eligibility criteria, benefit limitations, and portability issues.  Any of these may make it challenging for your clients to receive adequate coverage if they receive any at all.  


Personal LTC planning, on the other hand, allows for greater flexibility and independence.  Giving clients this flexibility safeguards their independence, ensures their plan dollars are portable from state to state (even internationally), permits decision-making to suit their preferences, and makes it more likely they can age in place as most aging Americans want. 


Avoiding Waiting Lists and Limited Access...

Based on historical context, budgetary constraints, and potential overwhelming demand, your clients could one day need to access one of the proposed state-based, government-controlled LTC programs, only to find significant waiting periods, waiting lists, and/or lengthy delays in receiving essential care services.  


In contrast, personal LTC planning ensures prompt access to care, preventing potential deterioration of health conditions during prolonged waiting periods.  With a personal LTC plan, your client can begin receiving care – with some plans offering a zero-day waiting period for LTC – as soon as they become ADL impaired, reducing stress in the family and improving overall outcomes.


Protection Against Rising Costs...

As time passes, the costs of long-term care services tend to rise due to inflation.  Most state-based,  government-controlled LTC programs being considered will face challenges to adequately keep pace with the increasing cost of care, likely leading to insufficient coverage for your clients.  


However, advisor-driven, personal LTC Planning can include guaranteed inflation protection options to mitigate the risk of rising costs of LTC services.  Furthermore, plan integration into comprehensive financial planning can provide tax advantages and asset protection that will likely far exceed whatever layer of financial security state-run plans might claim to provide.  These features will give your clients greater peace of mind, knowing their coverage can keep pace with a changing economic landscape.  


While state-based LTC programs may seem like a convenient solution, once you get past the noise and confusion and explain the benefits of proactive, advisor-driven LTC simply becomes the logical path for most clients.   


For all of these reasons, personalized LTC Planning is the only way to ensure the CLIENTS' needs are met.




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