Stephen J. Kaufmann, Co-Founder of The A Better Choice Foundation

Steve's Personal Story 

Newspaper Article, Northern Virginia Daily, Thursday, April 18, 1996

Seniors may want to investigate long-term care insurance to keep healthy estates intact.

As his mother sat comforting his dying 55-year-old father, Stephen J. Kaufmann struggled to come back up for air. He had reached the lowest depths while watching his uncle and brother destroy the family estate. And now their squabbling was imposing on what final moments Kaufmanns parents had together. 

Kaufmann stood up spewing angry words that created a fracture the three men would never fix. But it was a defining moment for the young lawyer who vowed to do whatever he could to save another family from such heartache. 

Twenty-two years later, Kaufmann counsels clients with the zeal of a preacher. Try as he might to contain his emotion, before long he perches on the edge of his seat with eyes blazing and hands flailing, as he embarks on his mission to share the word according to Kaufmann. He want everyone to go in peace, but knows it doesn't happen by accident. 

Misfortune like his parents experienced happens all the time," Kaufmann said, and " instilled me with nerves of steel to educate people." 

Kaufmann, an estate planning specialist with his home office in Luray, always thought his father a pilot who was shot down during World War II, as "Superman." When Kaufmann interrupted college to serve in the Vietnam War, he left behind a vibrant couple excited about retirement, with a home on Beacon Hill in Boston, and a cottage on Chappaquiddick Island in Cape Cod, Mass. Soon, it would be all taken away by the insidious disease of Alzheimer's which attacked his dad, and a lack of knowledge about how to plan for such a devastating event. 

In just two years, the family's $400,000 estate was left in shatters. Kaufmanns father had no life insurance, no health insurance and no will. While Kaufmann served overseas, his uncle and brother spent $25,000 in court costs each fighting to gain control of the estate. After a judge ordered the family's assets frozen, a stock market crash cost the family about 40 percent of its net worth; both homes were foreclosed upon. 

Kaufmann returned home to find his mother nearly destitute. After he buried his father, Kaufmann held up his fragile 48-year-old mother as they walked to the nearest Social Security office to apply for food stamps. 

"She was paralyzed with numbness because she thought that everything was taken care of, " he remembered. 

Today, Kaufmann, and his wife and partner, Boni, travel the nation spreading the news about estate planning. It is a ministry for the former state deputy commissioner of insurance who wrote the state's law on long-term care insurance. 

Fear, Kaufmann said, keeps many seniors from planning. 

"Many think if they don't plan for it, it won't happen," he said. 

Long-term care policies cover people for nursing-home stays, home healthcare and assisted living facilities. Seniors with assets to protect may want to consider a policy, but need to consult an estate planning expert before making any decision, 

Policies are tailored to meet each person's needs, and vary depending upon terms of the coverage, such as waiting periods and daily coverage amounts. The younger a person is when the policy is purchased, the lower the premiums, which can be costly. 

According to the Health Insurance Association of America, a plan that provides $100 a day for nursing home care, or $50 a day for home health-care would cost a 50-year-old $397 a year or a 65-year-old $1,058 a year. For a 79-year-old, the same plan jumps to $4,512 a year. Rates remain the same throughout the life of the policy. 

But there's no doubt that nursing-home care is costly also. The average stay costs $38,000, according to the American Health Care Association. In Northern Virginia, nursing homes cost $80,000 to $90,000 a year, Kaufmann said. 

"You can't save for it," he said. 

There's no guessing what the future will hold, but seniors can look at statistics for clues. A 65-year-old has a 45 percent risk of entering a nursing home, according to Richard Coorsh, spokesperson for the Health Insurance Association of America. Of those, 10 percent will stay in the home five years or longer. Twenty-two percent of people 85 years or older will enter a nursing home, Coorsh said. Women have a 50 percent greater likelihood of entering a home after age 65. 

Seniors can't look to the government for help. Medicare, which provides health coverage to seniors for skilled care, covers only about 2 percent of all nursing-home care. According to the American Health Care Association, the average Medicare patient stays 71.2 days. 

Medicaid pays more than 60 percent of all nursing home expenses and 44 percent of all long-term care expenses, Coorsh said. The average Medicaid patient stays nearly two years, the American Health Care Association reports. 

Seniors must keep in mind that they must be at poverty level before qualifying. Generally, patients "spend down" their assets to a level set by law and then may qualify for Medicaid assistance. 

People who transfer their assets through gifts or legal trusts in order to meet Medicaid limits will find that they may have to wait years before the assistance kicks in because the government requires waiting periods. 

"If you don't have a plan, the government will plan for you," Kaufmann said.

Although the numbers are rising, only 1 percent of seniors over age 65 have long-term care insurance, Kaufmann said. According to the Health Insurance Association of America, since 1987 3.8 million policies have been sold. 

A recent survey by the association found that two out of three purchasers have an average annual household income of $37,000. The average buyer is age 69, while 50 percent are over 70. A third of all buyers have assets of less than $30,000. The main reasons buyers gave for purchasing insurance is to preserve their financial independence, to avoid dependency on others for care and protect assets, the survey reports. 

Seniors interested in the insurance, should purchase a policy from a financially sound company, with at least an A rating, Kaufmann said. 

"This is our ministry," he said. "We're serious about what we do. In the next 15 to 20 years, we'll have a majority of seniors needing care with less people to pay for it. We're walking into a social problem with our elderly."