New York residents will now be able to use some of their life insurance policy to cover long-term care expenses, according to a press release.
Governor David Paterson signed the legislation into law on December 14. The new law will allow people to use accelerated death benefits to pay for long-term care costs like nursing homes, changing the definition of “life insurance” to allow polices to cover senior citizens who have been in assisted-living facilities for a minimum of three months.
“By passing this law, we no longer burden taxpayers with the long-term care expenses needed by the growing senior population and we’ve given thousands of seniors a creative and costsaving way to cover their care,” said state senator Jeff Klein.
New York could save about one billion dollars in Medicaid costs over five years by passing the legislation, according to a report and senate proposal released by Klein in 2008. Over two million New Yorkers alone will need a variety of long-term care services by 2015, and the state already spends 23 billion dollars on long term care under Medicaid.
Although this new change will benefit many, it won’t make a difference for those without coverage. A recent study by New York Life Insurance found that, while 42 percent of baby boomers surveyed said caring for an aging parent made them recognize the value of long-term life insurance, only nine percent of them actually owned a policy.