Pioneer Ridge Retirement Community is investing more than $7 million in its belief that Lawrence will continue to attract a growing number of elderly residents.
And one of its top executives knows those same people will be looking for ways to keep up with costs for ongoing care.
As the elderly population grows, so does the need for long-term care, says Tom Bechtel, regional director for Topeka-based Midwest Health Services. The company's Pioneer Ridge Retirement Community, above, is expected to open this spring in western Lawrence.
"We're already starting to see more private insurance," said Tom Bechtel, regional director for the new project's owner, Topeka-based Midwest Health Services. "We know the elderly population will be hitting this market particularly hard. There will be a huge explosion in the age group we'll be targeting."
A rarity even five years ago, long-term care insurance is gaining popularity in the Lawrence area and across the state.
Executives at several retirement communities in Lawrence say they are seeing more people preparing financially for their future through insurance, whether it's to pay for limited services in an apartment or for 24-hour monitoring and assistance in a skilled-nursing area.
Either way, the choices can make a big difference.
"It's becoming more popular," said Jan Maddox, a director for Brandon Woods Retirement Community, 1501 Inverness Drive. "People have seen the need. It can cost you up to $40,000 a year to stay in a long-term care facility. A lot of these people are probably paying $6,000 a year for their premiums. Economically it can make sense."
But making such decisions isn't easy, state regulators say, and the stakes are high.
Rising costs catch peoples' attention, said Kathleen Sebelius, Kansas insurance commissioner. Medicaid reimbursements for nursing-home care in Kansas have increased 37 percent during the past five years to an average daily rate of $91.65 last year, up from $67.11 in 1995.
Two out of five Kansans receiving long-term care rely on private money to pay their bills, while 55 percent turn to Medicaid, Sebelius said. Fewer than 5 percent have long-term care insurance.
"As long-term care costs continue to increase, buying insurance may make more sense," Sebelius said.
But such policies are not for everybody, she said.
Her office put together several issues to consider when deciding whether to buy such a policy:
l You should not buy a long-term care policy if you have trouble stretching your income to pay for utilities, food and medicine.
l If you are buying a policy to protect assets and your assets are worth less than $50,000 long-term care insurance may not be the best approach.
l If you will be paying premiums with only your own money, such a policy may be unaffordable if premiums would use up more than 7 percent of your income.
For someone at least age 65, monthly premiums for long-term care insurance can cost $100 to $300 a month, the insurance department said.
A person determining that a long-term care policy is appropriate then must move on to the next big decision: Deciding which one to buy, said Melissa Gregory, director of the insurance department's Senior Health Insurance Counseling for Kansas program, or SHICK.
Such policies are term insurance offering protection only as long as premiums are paid and can pay for services not covered by Medicare, she said.
Unlike Medicare supplement policies, long-term care policies are not standardized. Potential buyers should ask themselves about their personal goals for care, ability to afford such care and risk factors that could require significant care, Gregory said.
"You need to be very clear on what you're purchasing," Gregory said.
The SHICK program has certified counselors to help people make decisions about the appropriateness of insurance for long-term care.
More than 100 companies are licensed to sell such policies in Kansas, which can lead to hundreds of questions.
"You've got a lot of players in the mix and a lot of products in the mix," Gregory said. "It's really important for people to be as informed as possible. They don't have to know everything, but if they know how to call someone for help that's what they need to remember. There are places to go for answers."
George Kinnard is the SHICK counselor in Douglas County, available through Douglas County Senior Services, 745 Vt. The phone number is 842-0543.
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