Long-term care insurance (“LTCI”) provides for many elder care services, including nursing home stays, and others that are not covered by Medicare, Medicaid or traditional health insurance policies. LTCI policies generally pay a daily benefit for long-term care services up to a pre-determined dollar cap and for a certain amount of time.
About 60 percent of the population over the age of 65 will require at least some form of long-term care in their lifetimes. The cost of nursing home care can be astronomical – the national average for such care is approximately $90,000, and in some locales, can exceed $200,000 per year. As a result, even a carefully planned estate can be depleted should the need for long-term care arise. LTCI is an under-utilized tool that can prove tremendously helpful for the long-term care prospects of many. Currently, very few Americans are insured by LTCI policies.
LTCI can be a superior option for many, for at least several reasons. First, not everyone is eligible for Medicaid. Second, even if one can qualify for Medicaid, one must first “spend down” his or her assets in order to qualify. Third, Medicaid recipients are limited to the services (and facilities) which participate in the Medicaid program. Finally, there may be other benefits associated with LTCI policies, such as possible tax benefits for premiums paid.
One of the biggest problems with LTCI policies is that insurance companies do not presently lock their rates, so that an insured may face increased premiums later on. Another big problem is that, often, by the time a person wishes to purchase an LTCI policy, he or she is uninsurable due to health-related problems. This problem can be avoided, of course, by purchasing an LTCI policy when one is still relatively young and healthy.
Services: There are many different types of policies available from a variety of carriers. Some policies only cover nursing home care, while others include home health and assisted living care. To qualify for coverage, policies require a “triggering event,” such as cognitive impairment or the need for assistance in two basic activities of daily living, such as dressing, eating and bathing. Moreover, virtually all LTCI policies have an “elimination period,” which is the amount of time the policy holder must wait before coverage begins. Elimination periods range between zero and 90 days, or longer. During the elimination period, the insured incurs the out-of-pocket costs incurred for services. Although most policies issued today cover care regardless of where it is provided, some older policies restrict coverage in this regard.
Choosing an LTCI Policy: Careful discretion is necessary when choosing an LTCI policy. Obviously, the types of services covered, the length of the “elimination period” and the carrier’s definition of a “triggering event” must be taken into consideration. One must also pay careful attention to the specific carrier’s claim record – the speed and manner in which companies honor claims made by their policy holders. It is vital to get as much information about the insurance carrier and the particulars of a given policy before going forward.
Eligibility and Costs: Each LTCI carrier has different underwriting criteria which govern an applicant’s eligibility for any one policy. Costs also differ between carriers and between different policy types. It is a good idea to compare prices between different providers in order to achieve the most optimal rate. Similarly, in the event that you are denied eligibility by one carrier, be certain to apply to others, as you may be eligible in their different underwriting guidelines.
“I needed help with my Medicaid application, I am so happy I found HPSNY. They walked me through every step and even arranged home care while my application was pending. Thanks again, I don’t know what I would have done without you”. – Margie S. Brooklyn