Advisers Pitch Buying Long-Term Care Insurance Early

THE HIGH COST of nurs- ing home stays and home health aide services has financial planners and insurers marketing long-term care insurance to a younger audience.

Frank McKinley, a financial planner based in East

"You can't get it after you've had a stroke or been treated for cancer. That's like calling for homeowner's insurance while the house is on fire," says McKinley, who also advises people to open a Roth IRA, a retirement account in which withdrawn money is not taxed, to save cash that will fund the policy's premiums during retirement.

In New Jersey, a private room in a nursing home costs an average of $105,779 annually, according to a survey conducted this year by the financial services company Genworth Financial. Meanwhile, a home health aide licensed and certified by Medicare costs an average of $83,329 annually, while a one-bedroom unit in an assisted-living facility will run New Jerseyans an average of $59,050 per year, the survey said.

Health insurance covers few costs resulting from long-term care, which consists of custodial care with activities of daily living such as eating, bathing and dressing, as opposed to skilled care like medical, nursing or rehabilitative services, according to the Insurance Information Institute, an education group based in New York City.

And government assistance through Medicaid is now harder to get. Before 2005, people could turn to the federal- and statefunded program to cover long-term care costs if they had spent down their assets two years before applying, notes McKinley. Medicaid provides money for health care to qualified low-income people. But the Deficit Reduction Act of 2005 increased Medicaid's look-back period to five years for how much assets the applicant has, making it more difficult to qualify for Medicaid assistance, he says.

Still, there are several reasons why younger people are resistant to the idea of long-term care insurance, all of which are unfounded, says Michael B. FitzPatrick, managing partner and co-founder of LTC Partnership, LLC, a long-term care insurance broker based in Parsippany

"People say 'It's nursing-home insurance. and I'm not going to a nursing home,'" he says. "Or they say it's for old people and they're only 60." FitzPatrick notes the insurance covers the expense of home health aides plus stays at assisted-living facilities or nursing homes. Also, 40 percent of the 13 to 15 million people in the United States who need long-term care are between the ages of 18 and 64, he says.

One bright spot is that more and more employers are offering long-term care benefits, which cost businesses little to no money and offer advantages to employees like discounts and medical-qualification waivers, FitzPatrick says. The percentage of workers at private companies with access to long-term care insurance has risen from 6 percent in 1999 to 12 percent in 2006, according to the Insurance Information Institute.