Denver—Calling the problem a "ticking financial time bomb," the Colorado association that provides retirement benefits to state employees is urging its members and retirees to purchase long-term care insurance.
The Public Employees' Retirement Assn., which administers benefits to 150,000 active state workers and 52,000 retirees, said paying a comparatively small, out-of-pocket monthly premium is the best way workers, retirees or their relatives can be assured of a safety net if they become ill, injured, or incapacitated for an extended time. PERA's affiliated plan sponsors include state government, state universities, the judicial system, and all school districts outside Denver.
PERA opened the LTC enrollment period Jan. 1 and was to close it April 30, but the board is likely to extend the deadline at least an additional month, said Renae McKenny, director of insurance programs. The next open enrollment period will not come until the year 2000.
"We expect this last month to have the onslaught," she said. About 40,000 people have sent in requests for information, she said.
The program, in addition to being open to employees and retirees, is available to spouses, parents, parents-in-law, grandparents and grandparents-in-law. It is designed to address the needs of those who become unable to perform activities of daily living such as dressing, eating, toileting and bathing. Though usually associated with those near retirement or the elderly, it is being promoted to the young and the old alike.
The individual pays the full premium, Ms. McKenny said. The program is being managed by Santa Monica, Calif.-based U.S. Care Inc. and is being underwritten by Rochester, N.Y.-based MedAmerica Insurance Co.
PERA said the average cost for a one-year stay in a Colorado nursing home is $42,000, and plan participants and their families end up paying more than half of all long-term costs.
The program pays a lifetime maximum of $110,000 to $350,000 depending on which one of three plans is selected. The cost also depends on age. For example, a worker who is 24 who chooses a basic plan would pay only $5 a month, while a 70-year-old retiree opting for the same benefits—nursing home and home health care—would pay $130 a month.