LTC Insurance Frequently Asked Questions
What is Long-term Care?
Long-term care is a variety of services that includes medical and non-medical care for people who have a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care is to assist people with support services such as Activities of Daily Living (ADL’s) like dressing, bathing, and using the bathroom.
Where do people receive long-term care?
Long-term care can be provided in many different settings. Most types of care are provided at the home of the person receiving care or in a community setting such as an adult day care center. Once someone is unable to receive care at home, they might move to an assisted living home, an Alzheimer’s facility or a skilled nursing home.
Who needs long-term care?
It is not just for the elderly. Forty percent of the 12 million Americans receiving long-term care are between the ages of 18 and 64. For those over 65, the likelihood that you will need some type of custodial care rises to 60%. It is estimated that people over 65 face a 40% lifetime risk of eventually needing skilled nursing home care of some duration.
Source: National Clearinghouse for Long Term Care.
How much does long-term care cost?
The average cost for long-term care varies depending on the type of care and the geographical area. The national average for a private room in a nursing home is $74,460. For a home health aide, the average cost is $19 per hour.
Source: John Hancock, Cost Of Care Survey.
Who pays for long-term care services?
You do. Health insurance, Medicare and Medicare supplements do not pay for long-term care services. They are designed to pay for short-term skilled rehabilitation services only. Many people think their disability insurance pays, but disability insurance provides income replacement only. It will not pay to cover any cost of care over and above current levels of income. For those who are retired, disability insurance is no longer an option.
Will Medicare cover my long-term care?
Medicare and Medicare Supplemental plans cover long-term care only to a very limited extent. They only pay for skilled medical rehabilitation in a nursing home over a limited period of time, typically three weeks to a month, after a hospital stay. They do not cover custodial or intermediate care in nursing facilities.
Will Medicaid cover long-term care?
Medicaid is a state/federal welfare program that provides benefits covering nursing home care and limited home care only after you have spent down (depleted) a specified amount of your personal assets. To qualify for Medicaid, you must:
- Deplete most of your assets to a maximum of $2,000.
- Have directed most of your income toward your care and;
- Require nursing home level services. No one would choose to live in a nursing home.
Who is long-term care insurance for?
All adults should consider purchasing long-term care insurance. The need for long-term care services can happen anytime due to an illness or accident. As we age, the risk of needing custodial care becomes even higher. The younger you are when you apply, the less expensive the insurance will be, and the better chance you have of qualifying because of good health.
What exactly does long-term care insurance cover?
It all depends on the type of plan you choose to purchase, but in general long-term care insurance covers skilled and custodial services in a variety of settings, including in-home skilled and custodial care, adult day care, assisted living facilities, nursing home care and Alzheimer’s centers.
How do I qualify for long-term care insurance?
Long-term care insurance is underwritten according to your medical history and current health status. When you apply, you must also be able to perform all the basic activities of daily living (ADL’s) including bathing, dressing, eating, toileting and transferring.
If I move, will my policy move with me?
Yes, most policies have what is called “portability,” which means they can be used anywhere within the U.S. Some carriers have policies that will even cover benefits outside of the U.S.
Do I commit myself if I submit an application?
The short answer is NO. If a policy is issued, you have 30 days, perhaps longer depending on the plan, to change your mind, reduce coverage, or increase coverage provided your health status does not change. You have nothing to loose by submitting an application to see if you can get coverage. When an application is received, the underwriting process can take up to 2 months or longer, depending on availability of and extent of records. Some people have more “colorful medical histories” (like mine) than others . An application requires three key elements: premium payment, a signed HIPAA compliant authorization form providing for release of medical information, and a full and complete application. If the company approves you for coverage, they will issue a policy. That is when your 30 days evaluation period begins. Is what is effectively 90 days enough time to really think this through? Most people would say so. The underwriting period is a great time to discuss your coverage with family and friends. Don’t get stuck with paralysis of analysis. If you change your mind, all money is refunded to you.