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Options for Funding Long-Term Care in Minnesota: A

consumer perspective

Kelli Jo GreinerMinnesota Board on Aging

Consumer Information Assistance and Advocacy Team4/2/04

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Beyond LTC InsuranceReverse Mortgage Annuity

An annuity is purchased with a portion of the loan amount

Annuity continues if borrower sells home or moves

Available on a limited basis Considerations

Same as Reverse MortgageMay include additional charges Tax implications

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Beyond LTC InsuranceLTC Annuities - Deferred

Available to age 85; 7 broad health questions most can satisfy

Two funds; one for LTC expenses, the other is a regular cash fund

ConsiderationsIf LTC fund not used, can be passed to beneficiariesNeed to plan for inflationLTC costs may exceed benefit amountTax implications

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Beyond LTC InsuranceLTC Annuities - Immediate

Available to someone who is uninsurable or already receiving LTC

Single premium payment converted into monthly income

Pay out schedule is based on age and gender Considerations

Resources may be limited if inflation is not planned forIncome stream may be insufficientTax implications

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The IssuesComplex issues Is income and asset base sufficient to

warrant purchase of annuity?Has comprehensive long-term care

planning been done?The bottom line is that each of these

options has pros and cons and there is no “one perfect option”

Senior LinkAge Line® has received very few inquiries about these options

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Education, education, education

Increase awareness and role of these LTC funding options

Should be Easy to understand Comprehensive Objective Focused on the individual being assisted

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The Senior Linkage Line® and private options for funding long-term

care Goal: Help Minnesotans understand

private funding optionsand the role it can play in meeting their long-term care needs.

Provide objective, comprehensive information on LTC policies available in MN

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CMS LTC InitiativeHelping American Families Find and Pay for Quality Long-term Care

Goal: Increase consumer awareness of the options available to plan for and finance long-term care, including long-term care insurance, use of reverse mortgages, and annuities.

National Rollout - April 2004

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Senior LinkAge Line®

Available statewide by calling 1-800-333-2433

State Health Insurance Assistance Program (SHIP) for Minnesota

www.MinnesotaHelp.info™ - Statewide resource database with thousands of long-term care resources