News from Deputy Majority Leader Senator Jeff Klein

Representing Bronx and Westchester Counties FOR IMMEDIATE RELEASE: December 16, 2010 Contact: Samantha Dym Office: (718) 822-2049 Cell: (516) 204-4547

NEW LAW GIVES NYS SENIORS ABILITY TO PAY FOR NURSING HOME CARE WITH LIFE INSURANCE MONEY
Klein Says Could Potentially Save State millions in Medicaid Monies
NEW YORK, NY - State Senator Jeff Klein (D-Bronx/ Westchester) announced on December 14th, that his bill giving individuals an opportunity to use a portion of their life insurance policy to cover nursing home and other long-term care costs was signed into law by NYS Governor David Paterson. The new law allows people to divert their accelerated death benefits to pay for their long term care by changing the insurance law to expand the definition of the term "life insurance." Under the law, life insurance policies can be used to cover seniors who have lived in nursing homes for at least three months. As baby boomers age, more than two million New Yorkers will need services ranging from home health care to nursing home care by 2015. This new law gives individuals more options to better plan for their own future long term care needs while allowing them some measure of asset security. "Currently, New York State spends $23.1 billion on long-term care under Medicaid. 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 cost saving way to cover their care," said Senator Jeff Klein (D-Bronx/Westchester). ³The Life Insurance Council of New York, Inc. (LICONY) applauds Senator Klein and Assemblyman Morelle for sponsoring legislation that will provide insurers and policyholders with another option for utilizing their life insurance death benefit when it is needed and when they choose to exercise the option,´ said Diane Stuto, Executive Vice President of LICONY.

LICONY is the domestic trade association representing the life insurers of New York and the nation. LICONY currently represents 64 life insurance company members, which offer the vast majority of the life, disability income and long term care insurance, as well as annuities, issued in the United States. In 2008, Klein released a report that found that New York State could potentially save an estimated $1.1 billion in Medicaid dollars over five years by passing his bill (S.7196). The report - Your Money or Your Life - found that long term care insurance in New York is prohibitively expensive and often insufficient to cover the actual cost of care. For many individuals this drives up reliance on Medicaid. Klein proposed enabling policy holders to accelerate the death benefit of their life insurance for long-term care which would allow New Yorkers to tap into an addition reserve of funding. According to Klein's report, the average daily benefit for nursing home coverage with long term care is only $177, falling short of the $263 average statewide cost of care ($308 in New York City). The average premium in 2007 was $2,862. Approximately only 400,000 New Yorkers own long-term care insurance, while a whopping nine million have life insurance. # # #

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