Is Long-Term Care Coverage Right For You?
The federal government says about two-thirds of us will need long-term care. This care is very expensive and is not usually covered by health insurance, disability insurance, or Medicare. So how will you pay for this care if you need it?
One option is to purchase long-term care insurance. This coverage pays for your care when you can no longer perform normal activities of daily living like bathing, dressing, feeding yourself, getting from a bed to a chair, and using the toilet or if you develop cognitive impairment. If you are eligible for the home health or community care services of long-term care insurance, it will also pay for services like helping with household tasks, meal preparation, and grocery shopping.
If you meet the eligibility requirements, the cost of an assisted-living facility is covered by long-term care insurance. However, some assisted-living facilities require residents be able to perform most of the daily living activities noted above. This requirement would not allow the costs of those facilities to be covered by long-term care insurance.
Considering The Cost
Long-term care insurance itself can be very expensive, and the number of companies providing this insurance has dropped over the past several years as the cost of paying for the care has risen. Policyholders have sometimes been hit with large premium increases.
On the other hand, paying nursing home expenses can quickly deplete your life savings, leaving you dependent on Medicaid and leaving nothing to your heirs.
The cost of a policy varies greatly depending upon the insured’s age, gender, marital status, elimination period, benefit period, daily policy limit, and inflation protection options. Please see an insurance agent for more details.
What's Covered?
Comprehensive long-term care policies typically cover skilled nursing care, intermediate care, custodial care, adult day care, and hospice care. Policies will cover care performed in facilities such as nursing homes, assisted living facilities, and hospice facilities as well as care performed in the insured’s home. Policies do not cover pre-existing conditions, mental or emotional disorders (except for clinically diagnosed Alzheimer's disease or related degenerative or dementing illnesses), alcoholism and drug addiction, or self-inflicted injuries.
Long-Term Care Partnership Program
The Long-Term Care Partnership Program is a joint federal-state policy initiative designed to promote the purchase of private long-term care insurance, minimize the costs of the Medicaid program, and allow policyholders to pass assets to their heirs. The asset protection offered by the program is dollar-for-dollar -- every dollar of coverage that your long-term care policy provides allows you to keep a dollar in assets that normally would have to be spent down to qualify for Medicaid.
For example, say a Pennsylvania resident buys a Long-Term Care Partnership policy from a private company, uses the insurance, and exhausts the policy’s $300,000 in benefits and then qualifies for Medicaid. The policyholder will then be able to bequeath $300,000 of his assets to his heirs without fear of Medicaid asset recovery.
Need More Help?
For more help, to get answers to your insurance-related questions, or if you are facing rate increases in your existing long-term care insurance or experiencing issues with an insurance company's determination that a benefit trigger is not met our Consumer Services Bureau can help! Visit our Need Help page.
The National Association of Insurance Commissioners - NAIC also offers great resources for help navigating long-term care.