Clients need a little LTC advice

Addressing long-term-health-care insurance as part of a client’s financial plan may be uncomfortable, but not acting can lead to a lifetime of savings’ being erased in months.
Too often, clients are faced with heartbreaking health care decisions that could have been addressed earlier and more easily with better financial planning, industry leaders told advisers Tuesday at InvestmentNews’ Retirement Income Summit in Chicago.
“We have to get emotion in the mix,” said John W. Wheeler Jr., vice president of Water Tower Financial Partners LLC. “My son and I are very close, but I don’t want him changing my diaper.”
The speakers all acknowledged that discussing long-term health care with clients is difficult — particularly because of the stigma associated with nursing homes and other centers for long-term health care.
“Getting old sucks,” said Ben Neiburger, an attorney with Neiburger Law Ltd. “What a depressing conversation.”
But Mr. Neiburger said despite the awkwardness, advisers must still educate clients on long-term care without forcing them to make decisions. He also encourages advisers to ensure that their clients have proper estate plans in place. “I’ve seen $500,000 in assets that Mom and Dad had scrimped to save for an inheritance for the children burned away in a couple of years” Mr. Neiburger said.
Long-term-health-care insurance is only part of the solution, said Mark Meiners, professor of health administration and policy at George Mason University. He said he’s optimistic about progress being made on private and public partnerships that provide more-affordable health care options for consumers.
Right now, Connecticut, California, New York and Indiana have a long-term-care-insurance partnership that gives residents in those states access to affordable long-term-health-care insurance; if the benefits are exhausted, Medicaid then covers continuing care. The Deficit Reduction Act of 2005 allows more states to develop partnership programs, and Mr. Meiners is hopeful that other states will soon form such partnerships.