Long Term Care

There is vast range of long term care policies offered from company to company to suit individual needs. However, you must be able to understand and differentiate what those policy embraces, since companies have different underwriting procedures and definition on LTCi policies and premiums. A financial advisor that is well versed in LTCi can help you find the best deals and save on your premiums.

You must have heard the term “premium” for the nth time, but do you know what premium means or covers in long term care? An insurance premium is the amount of money charged by companies for coverage, depending on the needs of the policyholder. It is strongly recommended to get quotes from the insurance provider before paying the premiums. The common coverage included in the premiums are as follow:

Age and Health – Many people don’t know that LTC policies can be purchased as early as age 15 until the age 85. It’s common for people to wait for their retirement years-the time they consider insuring themselves. However, the older you are when you buy the premiums means the costlier your premiums will be. For instance, a 55-year-old might pay twice or thrice the price of the premiums of a 50-year-old. Also, expect a much higher premiums if you are suffering from chronic illness or disability. Keep in mind that insurers have different underwriting procedures; a company may refuse granting coverage due to health condition. It would be better to purchase policy before serious health problem arises; this is because the premiums will remain the same even after the individual purchased the policy.

Daily or Monthly Benefit Amount – This is the amount paid for long term care costs either on daily or monthly maximum. A benefit of $100 a day will cover for $100 long term care services.
Benefit period – This is the length or period the policy will pay for the benefit amount as determined in the number of years.

Elimination period – This typically works as deductible. This states the number of days, normally from 30, 180, or 360 days, the insured must pay for his or her care before LTC kicks in. Most insurance companies say that the longer the elimination period is the cheaper the premiums will be. However, it is best to determine how likely you are to finance your care using your personal resources. If you have enough resources to cover the care, then get at least 180 days elimination period.

Inflation Protection – This feature is only optional or considered as “rider.” The inflation rider increases the benefit amount year to protect the insured from heightening costs of long term care. You can buy an inflation protection that increases 5% compound annually. However, as long term care rapidly increase, the 5% compound won’t suffice to stay abreast with the costs in the succeeding years. Most insurers recommend the inflation protection to policyholders age 75 and above.

You might have noticed that most long term care insurance policies have no fixed price. Yes, they don’t. This is because the individual can freely design the policy coverage based on his or her needs and condition. But most insurance companies have this creed: the younger and healthier you are, the less expensive your premiums will be.

Assisted living (AL) or residential care is a type of arrangement that provides personal care services and assistance to daily living. It is closely similar to nursing home care, but the only difference is the independence freely granted to the residents as they can receive services in their own residential setting. The activities that are included in this care can range from bathing, dressing, toileting, walking, and etc.

The scope of services under this care varies from state to state due to licensing requirements. The state regulations that allow those services offered under ALFs are not standardized. Some types of assisted living services are offered in one state but many or may not be available in other states. However, a recent ruling is pursued to mandate the state legislature to come up with unified model of assisted living for all states.

AL normally suffices the inadequacies in home care and nursing homes. Before, a person had to stay in a nursing home even though the services deprive a person with independence. Nowadays, assisted living benefits those who want home-like environment while receiving assistance for daily living or treatments without a compulsory 24-hour nursing care.

ALFs are more comfy than those in hospitals or nursing homes. Newly renovated facilities are themed in apartment style with private rooms or suites. Some ALFs look as if you were in five-star hotel with cafeteria, gardens, atriums, and more. A cozy dining area is where seniors gather together and share experience while having a good meal. The environment is tranquil and relaxing for seniors that make them feel at ease even though far from home. A lot of social activities such as outings and games are organized for seniors to mingle with other adults and to keep them physically fit. Overall, the architecture in ALFs is more decent than those in nursing homes and hospital, and the services offered are far better.

Many of these facilities allow home health agencies to provide services for its residents. Some ALFs have in-house nurse or therapist to assist elders with health problems. Some states allow assisted living to include some kind of nursing home services. The main reason why some type of nursing care is allowed is because many residents particularly those 65 and above are frail and more prone to sickness, so nursing care should be readily available in the facility.

Some ALF offers specialized care for certain ailment/s. For example, there are ALF that focus on Alzheimer’s patients. Facilities rendering services for Alzheimer’s normally have specialized type of care and supervision to help the patients survive the sickness.

However, not all ALF residents need care or assistance. Some elders stay there to greet adulthood with full compassion and live simpler life together with the adults who share the same dilemmas. Most residents have chosen to stay in AFL than in retirement communities to secure independence and protection. As they become older, they will need more intensive care that can be provided in ALF. Assisted living always provides home-like environment and experiences for seniors whose years left are counted.

Have you heard of long term care insurance for so many times but still unaware on how is it going to affect you? The common blunder is that people only consider getting insurance coverage once they get into a point when they are seriously ill, incapable of doing simple chores, and run out of budget for nursing home care. You may have vigorous lifestyle and health today, but someday those comforts will suddenly fade in later years. Long term care insurance, although ideally, saves you from catastrophic experiences of adulthood and retains the life you have had, without worrying that your family’s finances are at stake. Here are some reasons why long term care insurance is important:

1. Having long term care insurance keeps your independence and dignity. How? Some people exhaust their assets for out of pocket expenses on nursing home only to end up bankrupt, while others puts their money in trusts. Without sufficient money or resources to fund for long term care, you may qualify for the federal program called Medicaid. Medicaid beneficiaries receive mediocre services: most nursing homes reject Medicaid patients, and if they do they only offer semi-private with little or no privacy. It’s never that easy to qualify for Medicaid than what you have expected, and if you prefer home care or assisted living then Medicaid is not a good option. Medicaid won’t sign you up for coverage unless you have net assets of $2000 or have your properties under estate recovery. Whether you like it or not, Medicaid will let you stay in nursing home, period. However, if you have long term care insurance you can freely choose which type of setting suits you best and makes you feel comfortable. Assisted living facilities are far better from nursing homes where residents enjoy complete privacy and comfy home-like environment.

2. Married couples may have problems financing LTC. If one spouse needs LTC, the other will be forced to pay for outside caregiver or nursing home care. The money used in paying for the care usually comes from the couple’s savings or combined assets. If the care extends, the spouse may be left with minimal assets for future needs. However, LTCi fixes this issue where your spouse’s assets are protected.

3. Many healthy care giving individual do not consider insurance option and would rather pay their own care without help from anyone. If the care of the disabled or sick family member drags on too long, this can affect the caregiver both mentally and physically.

4. Long term care insurance relieves the burden it could give to your children, spouse, friends, and family members. So when your children or spouse promised to take care of you, the LTCi can help them fulfill that promise. The insurance can pay for additional home health aide or nurse to help your loved one perform care-giving activities.

5. You probably want to pass your hard-earned assets to your children, LTC insurance helps you protect your assets against the cruel cost of long term care so you can save them for your heir/s.

6. They say single men and women may suffer the worst because they are more likely to live alone. These people prefer to get as little help from their friends and relatives and shoulder everything on their own. LTCi helps those single individuals maintain a good lifestyle and health care.

Most long term care insurance policies trigger claims when either of the two events occurs: severe cognitive impairment and loss of two of daily activities or ADL. Here’s how claim’s process work:

Inability to Perform Activity of Daily Living (ADL)

Under federal and state law, activities of daily living include bathing, continence, dressing, eating, toileting, and transferring. It is inclusive of cooking and bathing. During the time of claim, the insurance company will assess your inability of performing activities under ADL.

The best LTC policies pay benefits for two or more ADLs without assistance, while not worth considering policies oblige applicants to get assistance with more than two. Beware of policies that ask you to drop more ADL’s for home care or care in assisted living facility.

Severe Cognitive Impairment

Cognitive impairment means a person’s intellectual capacity is impaired to the extent it has affected his or her short-term and long-term memory. Alzheimer’s or dementia falls under this category. The condition must be severe to trigger the benefit and to receive supervision. A cognitive impairment assessment will be performed to determine how severe the condition is.

The Plan of Care

After you pass the ADL and/or cognitive impairment assessment and become eligible for benefits, a plan of care will be followed and developed. The plan of care is a written individual plan, directed by a licensed doctor, registered nurse, or licensed social worker, which determines the type of care and frequency of LTC services you will need for your condition. Federal and state laws mandate tax-qualified policies only the one ti provide benefits for qualified long term care services that are embraced in your Plan of Care.

Also, if you become eligible, some policies may even incorporate “homemaking services”such as cooking and cleaning in your benefits. These activities are included in “Incidental Activities of Daily Living” or IADLS.

How to File a Claim

The must provide three sources to the insurance company: the policyholder, the provider, and the policyholder’s physician. Make sure everything that you have stated from the three sources is accurate and real, unless you want your claim denied or delayed.

You may consider help from a care coordinator of LTC insurance expert to assist you with the claims process. Before purchasing coverage, do a research on how the company handles its claim process to its policyholders. If the company has good experience in claims, then rest assured you’ll get a good service too.

What if my claim is denied?

If you follow the claims process properly and provide legit information, your claim will be less likely denied. Most states have passed laws that give high penalties to insurance companies that deny a legitimate claim. If your claim is denied, you should seek help from attorney or financial expert.

Care Coordination

Care coordination is defined as service that helps manage the person’s care with the assistance from family, friends, care givers, and health care practitioner. Care coordinators are health care practitioners that assess the person’s needs, determine the type of care needed, and assist the family in obtaining the care they need.

The Long Term Care Insurance Partnership Program was established in 1980s and piloted in four key cities — California, Connecticut, Indiana, and New York. Its goal is to promote affordable and marketable LTC policies to the masses that will eventually lessen the burden of Medicaid in paying long term care and help people finance their own care without worrying about Medicaid eligibility rules. Those who have depleted their insurance benefits may still turn to Medicaid for assistance. Currently, the partnership program has been reinforced in almost all states in America.

Consumer Demographics

The partnership program was designed for low to middle income Americans since they are the ones who most likely deplete assets for Medicaid. However, some surveys indicate that most consumers of partnership policies are those with substantial assets. In California, Connecticut, and Indiana, the majority of policyholders own assets beyond $350,000. In New York the partnership program has fascinated higher income groups because the benefits can increase their savings.

Expansion through DRA

The Deficit Reduction Act (DRA) of 2005 mandated all states to adopt the partnership policies. Although the states may alter some provisions, all state policies must meet asset protection, tax qualifications, inflation protection, and other consumer protection. The DRA also mandated the Department of Health and Human Services to impose reciprocity agreement, allowing the policyholders to use their benefits when they move to other supporting states.

How Partnership Programs Affect Medicaid Spending

Proponents and opponents of Partnership program have their own say as to whether the policy has helped Medicaid with its budgetary problem. Opponents said that helping people finance their own care will lessen their dependence on Medicaid; thus, Medicaid spending for long term care will be reduced as well.

Others argue that partnership policies won’t take in effect to cut down Medicaid expenditure if they qualify people who can actually handle their own care. There’s a probability for Medicaid to save dollars if the policies are bought by consumers who have not bought other policies. Without asset protection, this could even lead to greater Medicaid expenditures. However, it is not easy to conclude whether partnership program benefits Medicaid or not because the program is relatively new and few policyholders have used the benefits.

Issues and Concerns

Educating the public about the Partnership program seems hard for the state government. The expansion of Partnership program only adds confusion to consumers as to deciding whether to buy policy or not and, if so, which type of policy.

Many consumers do not understand that they cannot automatically qualify for Medicaid. They must meet the state income and other eligibility criteria before they can qualify for the benefits. To qualify for partnership policy, you should be impaired or need assistance with two or more activities from daily living. The requirements for functional eligibility vary in every state, with restrictive rules applied. This can pose problems to purchasers who exhaust their partnership policies and then cannot qualify for Medicaid. Home care is not possible with Medicaid. Medicaid normally pays the stay in none other than nursing homes.

The Florida Partnership for long term Care Program was passed in the government of Florida alongside the execution of the new Federal policies with reference to Medicaid Programs in the mentioned state which occurred in November 2007. This aims to encourage a certain individual in Florida to avail of long term care insurance with the assurance that the government will lend a hand to the purchaser making every single detail to be much easier to handle.

In layman’s term, the Florida Partnership for long term care implies that if an individual in Florida decides to purchase a LTC insurance policy which is eligible as a Partnership plan, the person insured will be a qualified Medicaid beneficiary. A certain individual who is a legal resident of Florida and buys a Long term-care Partnership Plan will be entitled without meeting the necessary Medicaid asset spend down requirements set by the government.

To explain it further, suppose a LTC purchaser gets a contract that meets the standards of a Partnership plan with the total communal amount of $200,000. In case this person has used up all the policy benefit, there is no need for him/her to strip off $200,000 away from his personal assets just to qualify for Medicaid. This simply means that if the person who purchased the Florida long term care Partnership Program has less than $200,000 even before the policy benefit has been all used up, the person would be able to avail of Medicaid benefits without meeting the spend down requirement of $200,000.

As these processes are done, a qualified insurance agent must always be present. A certain Florida long term care Partnership Program purchaser should consult an agent that will assure the plan to be in the client’s advantage.

Florida Partnership policies are not really that different when it comes to the benefit structure. The only thing that the plan should meet is the tax qualification plan as defined by the Federal law and must include inflation requirements which are:

1. People who are under 65 of age- the inflation provision should be Compound.
2. People who are 61-76 of age- the inflation requirement is Some Protection
3. People who are over 76 years old- there is no inflation requirement

If you already have availed of a LTC policy from other states, there is still a chance for you to be qualified for the Partnership Program. The terms and conditions will depend upon the law pertaining to the Partnership in the state where the long term care insurance was bought especially if their policy is different from Florida’s.

However, there is a law which implements that any Florida Partnership Policy issued after 1 March, 2003 should be swapped for a LTC policy that meets the requirements of a Partnership Policy. This is due to the fact that any policy issued after the mentioned date does not automatically imply that it is a Partnership Policy. That is why insurance companies in Florida have been making it much easier to make existing contracts qualified for exchange so that it would be eligible to become a Partnership Policy.

Most modern long term care insurance policies are packed with three features-benefit period, elimination period, and benefit amount protection- that can be customized accordingly. There are number companies offering long term care insurance, so expect some differences on those policies as well as the rules and regulations. Nevertheless, the three main features remain the same from one insurance company to another.

Benefit Amount

After the elimination period, the policyholder will be receiving the benefit amount or the sum of money that pays out for the person’s care once the person has completed the elimination period. The amount can be either daily or monthly. The national average daily cost for nursing homes and assisted living facility is a whopping $200 and up per day, the cost is even higher across the major cities and states such Texas, California, and Washington.

Determining the right amount for the benefit period can be quite confusing because most policyholders are not updated on the current prices of nursing homes and/or assisted living facilities, so chances are they end up on benefit period that is either higher or lower than the cost of care. The benefit amount should complement the monthly expenses for actual care. The policyholder should choose the benefit amount carefully to avoid costly mistakes. Don’t rush in deciding for the cost of benefit amount, otherwise, you must research first on the current nursing home costs that might affect the premiums, or seek advice from financial or LTC insurance expert. Keep in mind that high benefit amount results to higher LTCi premiums

Benefit Period

The last and one of the most important features is the benefit period. The benefit period is the length of time or how long the person will receive the benefits. Nationally, the average nursing home stay is within two to three years. Many LTCi financial experts also suggest getting benefit period not longer than 2 to 3 years. Most LTC companies offer policies that cover two years, provided with extension option up to five or lifetime coverage. Obviously, the policies with longer benefit period are more expensive compared to shorter benefit periods. However, nobody can dictate how long the benefit period should be because every person has different situation and needs.

The three features should always complement your needs and your financial status. Most insurance companies nowadays offer flexibility for the consumers to design their own policies that will tailor their personal needs. Choosing the best LTCi policy can be complicated if you have little background or experience on it, so it would be better to ask help from experts rather than take up the gauntlet

Elimination Period

The elimination period is the number of days or the length of time the policyholder will shoulder his or her own care before the insurance company barges in. There are various preferences on the number of days for the elimination period that a policyholder can choose from. These can range from 0 days, 30 days, 60 days, 90 days, 180 days, and 365 days. One simple rule applies: the longer the elimination period a person chooses will equate to much lower LTCi premiums. However, the person should decide wisely on how long the elimination period will be, considering his or her current and future financial resources.

Long term care insurance has been a craze these days since many adults are now aware on the diversities in later years. Alzheimer’s, dementia, multiple sclerosis, and many others are just few common age-related sicknesses that require long term treatments. If the treatments and stay in nursing home drag on too long, the person will suffer and end up impoverished. Assuming that you might be able to self-insure and you won’t need it your entire life sounds too good to be true. Remember that chronic illnesses and disabilities can strike anytime, particularly if your body and mind are already frail.

Long term care insurance is considerably the solution to the worsening problem with long term care. However, long term care insurance could turn out as the most sickening risk and jeopardize your entire assets if you fail to comprehend what it is all about.

Choose the appropriate daily benefit amount – The first thing you should look at when considering a policy is the daily benefit amount. Many policyholders mistakenly follow the benefit amount used by their friends or relatives, without knowing that the amount should complement their needs particularly their health condition. Don’t rely too much on the national average because the rates for long term care vary per state, and you could either fall short or pay higher than what is needed. The best thing you can do is canvass the prices first of various nursing homes in your area and then figure out how much you could shoulder yourself.

Determine the Elimination Period or deductible – Many consumers do not know what elimination period exactly refers to. In its simplest definition, the elimination period is the number of days you are responsible for your care without any cash out from the insurance company. For instance you buy a policy with 90-day elimination period; you are required to the expenses throughout the first 90 days. Most experts recommend 60-day or 90-day elimination period to manage out-of-pocket costs and keep the premiums affordable.

Why Bother on Inflation Protection? – Most policies offer this perk to protect the policyholder from the ever-increasing inflation rate. The inflation protection increases your daily maximum benefit but the price of premiums remains the same. This is beneficial because the person need not pay for additional premiums just to compensate the increment in the price of the nursing home; the premium automatically increases and does not require to be adjusted every year. The best inflation protection coverage automatically adds by 5% compounded annually. Expect this coverage is a bit pricier, but rest assured you are protected because your premiums remain the same even if the benefit amount increases.

Does the policy cover any medical problems?

Most insurance companies do not cover some pre-existing conditions for six months that may extend up to a year. Don’t get a policy that excludes mental disorder.

Choose only reputable and experienced insurer -

You are investing on huge financial stake for your health so it makes sense to trust only with a company that has proven track record in the insurance industry. There have been companies reported that avoided claims, so beware of those companies.

There has been massive concern on the threats of long term care as the costs of LTC are purging elders and their families to poverty, and the risks put greater weight on women. This may sound flattering for some knowing that women outlive men but, in some instances, such as long term care, this can be threatening. Long term care will haunt women in their later years when, regardless of physical or mental illness, they will have to bathe a frail spouse and look after a nearly dying parent.

The study conducted by Genworth Financial gives much strength on the impact of long term care on women. The following are the company’s main findings:

• Surveys say that there are about 23 million unpaid care providers in the United States, wherein seven in ten are women
• Nearly one infive unpaid caregivers or 19 percent give continuous care up to at least 40 hours per week, 80 percent of those are women.
• 44 percent of women age 65 and above are likely to need nursing home care versus the 24 percent of men,

Why women are at greater risks?

First, women live longer than men; meaning, they will require prolonged care either in a nursing home or at home. They also tend to live alone, especially the divorced women. Second, women perform the care giving role for their families and loved ones and these responsibilities may continue even if they are already old and weak. Lastly, women who have been providing cares to loved ones are six times more likely to acquire illnesses than those without care giving responsibilities.

Does the government provide help?
The government programs called Medicaid and Medicare mainly provide assistance to low-income groups, and the services they spare are just momentary. Medicare requires the person to receive care from a nursing home or a hospital for few weeks before the help commences. It is also not true that Medicare pays your entire stay in the facility; otherwise, Medicare pays the 20 days and then the next 80 days will be paid through a supplement. When the 100 days end, the person will be responsible for his or her own care and will be never again accepted.

How about Medicaid? Medicaid is a program aims solely in helping the needy to avail long term care. So if you don’t belong to the low-income group, you will be forced to give away your assets to meet the spend down requirements of Medicaid.

The wealthy may opt to self insure since they have enough to fritter. However, the majority of middle-class Americans are on the verge of becoming severely impacted by long term care.

Do You Need LTC Insurance?
Remember that long term care insurance isn’t for everyone. There are so many considerations you should assess to know if this will give you the peace mind.

1. How old are you?
According to financial experts, the recommended age to get LTC insurance is during mid 40s or mid 50s – the age wherein you are free from pre-existing health problem.
2. What is your net worth?
If your asset amounts between $75,000 and $3 million, LTC insurance is a great way to secure your assets. However, if your net assets worth only $75,000 and below, you may turn to Medicaid for assistance once your assets become depleted.
3. Does your family have health history of chronic disease such as Alzheimer’s, multiple sclerosis, dementia, and etc?

If you have a family history of chronic diseases, you are likely to acquire that disease that will require you to get long term care in the future. However, if you already manifest those illnesses, you may or may not qualify for LTCi.

Having yourself covered with a specific insurance policy is definitely a great way to guarantee self-protection especially when the time comes you already age. One of the most important policies to get is health insurance which is truly a lot of help particularly if you will be experiencing physical ailments in the future.

However, this is not only the coverage you will need to tell you the truth. That is why opting for long term care is more recommendable because it goes beyond what insurance like Medicare for example covers. Let say you get into an illness which prevents you from doing basic daily activities like walking, bathing, dressing and the likes and you might be needing health assistance for a long period of time, long term care is proficient enough in providing you further assistance in situations like this. You just have to determine which type of insurance policy to consider.

Talking about the kinds of long term care insurance policies, these vary depending on the company offering you the service. Thus, before deciding which to choose, make time to do comparison specifically on what the policy covers and how much it costs. This way, you get to educate yourself not only on the extensions and limitations of the policy itself but with the amount you need to prepare to acquire one as well.

There are many flexible options in long term care insurance. You can select a range of care options and benefits that allow you to get the services you need in the configuration that best suits you. Basically, the cost of your insurance policy is based on the type and quantity of services you choose to be covered, how old you are when you buy the policy, as well as optional services you have chosen.

The cost of long-term care varies significantly by state. To know more about the cost of care and coverage within your area, consulting from a representative of an insurance company, an insurance agent or financial adviser is the proper way to do it. Most of the time, the premiums generally remain the same each year. This means that the younger the first time you buy a policy, the lower your annual premium be. But remember your premium also depends on the amount of benefits and how long you want those benefits to be paid.

With the long-term care insurance, you pay premiums on the amount you already know and can budget for. Its policies have a benefit period or lifetime maximum benefit, which is actually the total amount of time or a total of dollars up to which benefits are paid. Common benefit period range from two, three, four and five years, and lifetime or unlimited coverage depending on the company you choose to use.

Different policies offer different payment options. Most of the policy, you pay them in accordance with the schedule you choose – monthly, quarterly, half yearly or annually. Generally, premiums are waived during the time you receive the services.