Insurance in your Senior Years

Mark Gottlieb is a masters-trained colleague that has been serving older adults in the greater Washington area for decades. He is the owner of Gottlieb Insurance Advisory, and speaks on topics related to older adults throughout our area. Thank you, Mark, for your contribution to the Support for Aging blog.

Protection from a variety of costs is crucial as we age, with the need for medical cost coverage, and for needed financial protection for loved ones at the top of this list. As such, this writeup provides a brief overview of costs associated with Medicare coverage, long term care insurance, and life insurance. 

Medicare 

Those who turn 65 or who subsequently lose employer insurance enroll in Medicare to serve as their "baseline". They will also enroll in a Part D/Prescription Drug Plan, which is sold by private insurance companies. The overall costs of a Part D Plan consist of the monthly policy premium, as well as the copays associated with whatever drugs a person takes. The copay pricing is based on a "tier" system, with low costs associated with Tier 1 and 2 drugs, and prices increasing when moving into Tier 3-5 drugs. There is Tier 6 price for use of insulin ($35/month). 

Thanks to the Inflation Reduction act of 2022, out of pocket maximum costs for your medications (exclusive of premiums) are $2000 in 2025, which will be increased based on inflation on an annual basis. 

Once all of the above needs are addressed, a person can select a Medicare Supplement Plan or a Medicare Advantage Plan which incorporates Part D (thus, MAPD). 

Long Term Care Insurance (LTC) 

These policies cover the costs of home care, adult day care services, Assisted Living, or Nursing Home. The amount of coverage is variable, based on a person's choice of policy design with respect to the number of days/years for which the policy will provide money from a pool of benefits; the amount of money that the policy will pay toward a person's care; and whether they build in an inflation rider through which the pool of benefits will increase in value over time 

LTC policies are activated either due to a person's need for assistance in performing 2 or more activities of daily living, which include bathing; dressing; grooming; toileting; eating; ambulating; transferring; and incontinence; and/or because of need for supervision due to cognitive difficulties typically associated with moderate or severe depression, or to Alzheimer's Disease. 

LTC policies are available as "standalone" plans or as "hybrid" policies. Hybrid plans are offered as Life Insurance or Annuities with an LTC riders. 

Hybrids are more expensive, but guard against the two major features which serve as the major objections to standalone policies, which are 1) no return of premium/"use it or lose it"; and potential premium increase. 

Life Insurance 

There are a variety of reasons to maintain life insurance in your senior years, which include: protection of a spouse or partner who may be losing your social security income; money for adult children; money for aging parents; for legacy; and to pay for final expenses. 

Life insurance can be purchased through a permanent policy such as whole life, and many such policies offer "riders" allowing money to be used as "living benefits"; through term policies, which can be purchased up to the age of 75; and final expense policies. 

Premiums vary by age; amount of the face value of the policy; and your health status.