An editorial in my local paper, the Minneapolis “StarTribune,” had me seething. You see, a man was mourning not just the death of his beloved 94-year-old aunt, but also that there was nothing left of her very hard-earned $250,000 in savings to pass on as inheritance. He was upset that all her savings went to pay for long-term care and then when that ran out, she “became a ward of the state.”
What he didn’t mention is that she had a choice.
She made a choice not to use a small portion of her savings each year—$3,000—to buy long-term care insurance, and I understand her decision not to, as she had modest earnings. However, it was a choice. Instead, the full $250,000 of her savings went to pay for care. If she had tapped her savings for $3,000 a year for a long-term care insurance policy, she could have conserved a large portion of her savings, gotten the care she needed in a facility of her choice and passed the money on to her family as a legacy at her death.
And to his point about her being a ward of the state: This is the part that really bothered me the most, because the government did take care of his aunt. After she ran out of money, the state of Minnesota did pay for her. She was not a ward of the state; she was a beneficiary of the state and its taxpayers. This civilized nation did take care of her, but asked her to use her resources first. That’s what’s called financial responsibility.
People often think that long-term care insurance is too expensive. In actuality, what’s too expensive is using your savings to pay for care. Your choice may come down to paying several thousand dollars a year for a long-term care policy, or paying more than $87,000 a year from your savings if you were to need care. (This is the average national cost of nursing home care per year.) It is a choice.