Long Term Care Insurance Illinois Partnership Program Costs & Review
Illinois Long Term Care Planning
Planning ahead for future long term care needs is key to protecting your retirement assets. Many people have had first-hand experience with a loved one who needed long term care. These experiences underscore the reality of the financial and emotional stress when someone needs long term care.
Besides protecting retirement assets, you get the peace of mind knowing you can cover the cost of long term care if you need it in the future. A long term care plan also protects your family from having to be caregivers. And it enables you to choose where you’ll receive any care needed in later years.
Who Needs Long Term Care Insurance
Someone turning age 65 today has about a 70 percent chance of needing some type of long term care during their lifetime. While one-third may never need long term care, 20 percent will need it for longer than 5 years. The average length of time people need long term care services is 3 years.1
In Illinois, the average cost for 3 years of long term care is $257,598 ($85,866 per year) at 2021 rates. That cost is projected to be $465,252 ($155,084 per year) in 2041.2
And it’s not only seniors that need long term care. Over 35 percent of people currently receiving long term care services are between 18 and 64.3
Does Medicare Cover Long Term Care?
Medicare is the federal health insurance program for people over 65 and for some younger people with disabilities. But Medicare does not pay for most long term care services. Specifically, Medicare does not pay for custodial care which makes up more than 90% of all long term care services. An example of custodial care is when someone needs help with their walking, bathing, eating, dressing or using the toilet.
Custodial care is also what people need most when they have a physical impairment from a stroke. Or, due to cognitive impairment from dementia or Alzheimer’s disease. Don’t make the mistake of thinking Medicare covers long term care costs. It doesn’t.
When To Buy Long Term Care Insurance
Like most advisers, we recommend buying long term care insurance in your fifties or early sixties. The primary reasons for this recommendation are:
- The younger you are when you buy a policy, the lower the annual premiums.
- By the time you reach your mid sixties, you’re more likely to have a medical condition that makes you ineligible for a preferred-health discount, or makes it tough to get coverage at all.
- Even though you’ll pay premiums a longer period of time, you’ll typically pay less overall than someone buying at an older age.
So it almost never pays to wait. And, while you’re waiting, you’re uninsured. If an accident or illness happens causing you to need long-term care, you’ll have to pay out of pocket.
Long Term Care Insurance Options in Illinois
There are two types of insurance in Illinois that pay for long term care costs. And each type of policy has its specific advantages. One of our licensed professionals can provide more details to help you decide which is best for you.
Traditional Long Term Care Insurance
You pay an annual premium, and if you need long term care due to a cognitive or physical impairment, the policy pays for your care. Traditional LTC insurance policies make up about half of all long term care policies sold.
Hybrid Long Term Care Insurance
Hybrid long term care policies combine the benefits of life insurance, or an annuity, with long term care benefits. You can buy a hybrid LTC policy by paying a one-time lump sum premium, or over a set period of time.
If long term care is never needed, the policy works much like a traditional life insurance policy. Life insurance with long term care would then pay a death benefit to your beneficiary when you die. And the death benefit is often similar to the amount paid for the policy. But if you need long-term care, the amount of money available can exceed the death benefit or long term care annuity value, often several times over, offering tremendous leverage of premium dollars.
Illinois Long Term Care Costs
This Illinois long term care cost data can help you decide how much insurance you need. And it compares nursing facility, assisted living and home care costs. Here is the 2021 cost of long term care in the State of Illinois.2
Illinois Long Term Care Costs – 2021 (annual)
|Region||Nursing Home (private room)||Nursing Home (semi-private room)||Assisted Living (private room)||Home Health Aide (44 hours/wk)|
|Illinois Median Cost||$85,866||$75,190||$53,850||$64,064|
Illinois Long Term Care Partnership Program
The Illinois Long Term Care Insurance Partnership Program combines long term care insurance protection and special access to Medicaid. The Illinois Long Term Care Partnership allows Illinois residents to shield a portion or all of their assets, while still remaining eligible to qualify for Medicaid. This asset protection kicks in if your long term care needs last longer than the protection provided by your Partnership long term care insurance policy.
Long term care insurance companies offering this protection are required by the Illinois Long Term Care Partnership to offer specific benefits. This requirement can help simplify your benefit selection when buying your long term care insurance.
Illinois long term care insurance providers, in conjunction with the Illinois Long Term Care Partnership Program, provide LTC insurance policies commonly referred to as Partnership Policies. It is Section 6021 of the 2005 Deficit Reduction Act that allows for Qualified State Long Term Care Insurance Partnerships.
Illinois LTC Partnership Rates
Illinois Long Term Care Partnership rates are about the same as other LTC insurance policies when designed with similar benefits. But some mandatory features of an Illinois Long Term Care Partnership Program policy can limit flexibility in benefit design.
Thus we recommend comparing Partnership to regular LTC insurance policies because a wider range of options may be available and better suited to your situation. One of our licensed professionals can illustrate your options.
Long Term Care Insurance Illinois Reciprocity
The State of Illinois has Reciprocity with other states LTC Partnership Programs. This is how LTC Partnership reciprocity works: If you purchase a qualifying long term care insurance Partnership Policy in another State, you will not lose your asset protection by moving to Illinois. The State of Illinois also recognizes any accumulated asset protection for the Medicaid program qualification, if you’re already receiving benefits under your Partnership long term care policy before moving to Illinois. Note that some states do not have this reciprocity.
Long Term Care Insurance Cost In Illinois
How much does long term care insurance cost in Illinois? Your long term care insurance rates will depend on your age and health history when you buy the insurance. Generally speaking, the younger and healthier you are the lower the cost. Your long term care insurance rates will also depend on the following benefits you select:
- Benefit Period
- Daily Benefit
- Elimination Period (a deductible in days)
- Inflation Protection (if chosen)
Long Term Care Insurance Companies in Illinois
Illinois long term care insurance is available from several well respected insurance companies. We compare these companies to find you the best protection at the lowest cost. Here is a list of long term care insurance companies in Illinois:
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1. 2022 U.S. Department of Health and Human Services (www.longtermcare.acl.gov), site accessed 03/15/2022
2. Cost of Care Survey 2021 (Genworth.com), site accessed 03/15/2022
3. Family Caregiver Alliance (www.caregiver.org), site accessed 03/15/2022