Long Term Care

You may need long term care at some time. The following discussion will address long term custodial care. Custodial care is for assistance with Activities of Daily Living ("ADL") such as eating, bathing, ambulating or dressing as opposed to medically necessary care for rehabilitation from an injury or illness. Skilled care is usually covered under normal Medicare and Medigap health insurance coverages whereas custodial care is not.

There are three ways to cover the cost of long term custodial care:

1. Private Funds:

   Currently, approximately 30-40% of the people receiving custodial nursing care in nursing facilities are paying the cost from their own funds;

2. Public Insurance: (Medicaid)

   Medicaid is need-based insurance co-sponsored by federal and state governments (welfare). You have to have very little money ($2400.00 or less in total assets) to qualify for this type of funding. Medicaid. Medicaid covers the costs for over 50% of residents in nursing homes today.

3. Private Insurance:

   Long Term Care insurance covers the cost of various types of long term care services. The following are a few points to consider when investigating the purchase of long term health care insurance policy:
   1. Coverage: Skilled, intermediate and custodial care in nursing homes, as well as, assisted living, home care and adult day care benefits in the same policy;
   2. ADL Requirements: The best policies only require you to be unable to perform 2 activities of daily living (i.e. feeding, bathing, etc.) to qualify for benefits;
   3. No Prior Hospitalization: Spending time in a hospital before entering a long-term care facility should not be necessary to qualify for benefits;
   4. Waiver of Premium: Premium payments cease after the policy starts to pay benefits;
   5. Guaranteed Renewable: Once the policy is issued, it should only be canceled for non-payment of premiums;
   6. Memory Lapse Provision: This provision requires the insurance company to reinstate a lapsed policy if you can prove that non-payment of premium was a result of cognitive impairment;
   7. Care Coordination: Essentially managed care for long term care providers. Remember to ask if it is mandatory that you use their coordinator or if a care coordinator is necessary to obtain the benefits from the policy;
   8. Submission of Bills: Will the providers of care be paid directly or will you have to pay them and submit the bills to the long term health care company;
   9. Approved Services: Make sure you know what services are approved by the policy before you buy it. Services that you will want may not be covered;
      Some variables to consider:

      • Elimination Period:

        How long insured must wait for the policy to pay benefits. The longer you wait, the lower the premium you pay. Pick the longest wait you feel comfortable with because the extra premium paid for immediate coverage may never be recovered;

      • Benefit Period:

        Choose a period tied to the eligibility period for public assistance (Medicaid) and the average survival rate in nursing facilities (around two years). Lifetime benefits are expensive and are sometimes unnecessary.

      • Daily Benefit Limits:

        One should pick a daily benefit (the amount the insurer will pay per day in a facility) based on cost today and predicted cost in the future. You can purchase an inflation rider which increases benefits (and the premium) with inflation. This is especially important for younger purchasers.

Our office will obtain quotes and guide you in acquiring a policy of Long Term Care coverage that will meet your individual requirements.