Paying for Home Care: Shared Care Insurance the Next New Solution?

With financial woes looming for many people approaching retirement age, many are wondering how they will pay for long term health care costs. A relatively new form of long term care insurance is starting to gain interest, a Businessweek article wrote this week. This increasingly popular option, “shared care,” makes that long term care insurance more feasible by providing expanded coverage for couples at a lesser cost than other options offer, Businessweek writes. 

Under these joint policies, couples purchase a combined pool of benefits that can be used by either or both spouses.

Like most everything in the world of long-term care insurance, it’s complicated. But what’s clear is that fast-rising costs have made shared care a more appealing option. New long-term care insurance policies cost 30 percent to 50 percent more than five years ago, according to the American Association for Long-Term Care Insurance.

“When I explain how it works and what you get, most people like shared care a lot,” says Brian Varian, long-term care insurance consultant for insurance brokerage Marsh Inc. in Woodland Hills, Calif. “It’s very favorable for couples.”

A look at the shared-care option within the broader context of changing long-term care insurance…

Q: How does shared care work?

A: Instead of purchasing a future pool of benefits for each spouse, the policies are combined into a pool they can each use. So, buying a three-year shared care policy each gives a couple up to six years of benefits; each buying a five-year policy gives them 10.

If one spouse develops a need for extended long-term care, such as from Alzheimer’s or a stroke, he or she could access most or all of the benefits. And if one dies without having used any coverage, the full benefits generally transfer to the surviving spouse.

Q: Does it cost extra?

A: Shared care costs more than separate policies with the same benefit period. But it can allow you to buy a shorter, less expensive policy, knowing that there ultimately is a larger combined pool of benefits to draw from.

For example, two typical three-year policies with the shared care rider will cost roughly 14 percent to 17 percent more than two separate three-year policies, according to Jesse Slome, the insurance association’s executive director. But that could still be more cost-effective in the long run by ensuring that one of them can get as much as six years of coverage if needed — double the length of the policy…. 

For more Q&A, read the full Businessweek article.  

Written by Elizabeth Ecker

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Elizabeth Ecker
Director of Content at Home Health Care News
Curious about all things, when not writing about senior housing topics, Liz is an avid explorer of food. She loves trying new recipes, new restaurants and new ice cream flavors. (Current favorite: Goat cheese with red cherries.)

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