Long Term Care FAQs
Answers to frequently asked questions about long term care.
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What about my family taking care of me?
First Lady Rosalynn Carter once said, “There are only four kinds of people in this world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.” Care-giving may be the most common experience we share as Americans. Family and friends are often involved helping provide care to some extent when someone begins to need assistance. However, intensive or long term care-giving can carry a significant emotional and financial burden on care-givers. As part of your Long Term Care planning, if you are considering family or friends to play a substantial role in providing your care, there are a number of questions to consider:
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According to studies about care-giving:
** “Boomer Wake-up Call: Balancing Work and Care-giving and the Costs Involved”,
Journal of Financial Service
Professionals, March 2000.
One of the leading reasons people buy comprehensive Long Term Care Insurance is so they can remain at home where their family is able to assist with their care and to support their emotional well-being, without their family having to assume 24/7 responsibility for all of their care-giving needs. The insurance pays for professional caregivers to assume the primary responsibility for care and helps the family avoid the financial, physical and emotional hardship that can accompany the role of being the primary, full time caregiver.
- “81% of American families have already faced a Long Term Care crisis, or expect to face very soon.”*
- “Almost 75% of those in the study indicated their care-giving responsibilities had adversely impacted their health. More than 50% said that care-giving impacted their performance at work.”*
- “Employees who care for elderly or sick relatives with LTC Insurance are twice as likely to stay in the work force as those caring for relatives without it”.**
** “Boomer Wake-up Call: Balancing Work and Care-giving and the Costs Involved”,
Journal of Financial Service
Professionals, March 2000.
One of the leading reasons people buy comprehensive Long Term Care Insurance is so they can remain at home where their family is able to assist with their care and to support their emotional well-being, without their family having to assume 24/7 responsibility for all of their care-giving needs. The insurance pays for professional caregivers to assume the primary responsibility for care and helps the family avoid the financial, physical and emotional hardship that can accompany the role of being the primary, full time caregiver.
What does Medicare pay for Long Term Care?
Medicare is the government health insurance program for people age 65 and older, and for younger people with certain disabilities. There is a common misconception that Medicare will pay for Long Term Care needs, but that is not true. As with any regular health insurance, it is not intended to pay for the costs of long term custodial care.
Medicare pays for certain types of care while you are recovering or rehabilitating, but under limited circumstances. Following is a brief summary of those services:
Once you have been hospitalized for three consecutive days, and if you are admitted to a
Skilled Nursing Facility for the same illness for which you were hospitalized within 30 days of
the hospital discharge, Medicare will pay the following for the Skilled Nursing Facility:
- 100% for the first 20 days each benefit period
- For days 21-100, you pay $148 and Medicare pays over that
- After day 100, you pay 100%
Medicare will pay for skilled care (part-time or intermittent) and/or rehabilitative (physical
therapy and speech therapy), and/or occupational therapy at home. These care benefits must
be deemed medically necessary and ordered by a doctor enrolled in Medicare, and your care
must be provided by a Medicare certified home health agency. Some home health aide type
services and medical equipment and supplies may also be available while qualifying to receive
skilled care.
Most people do not qualify for and receive skilled care for very long. One of the definitions for qualifying to receive skilled care services through Medicare is that you are continuing to recover from your medical condition. 95% of long-term care is custodial, not skilled. Custodial Care primarily means assistance with the Activities of Daily Living and is designed to meet the personal needs (as opposed to medical needs) of the recipient. Only Long Term Care Insurance pays for custodial care.
Note: This information is very general and not meant to provide legal or Medicare qualification advice. For further information about Medicare, refer to the handbook Medicare and You 2015, the guidebook published annually by the Center for Medicare and Medicaid Services, or refer to your local Medicare office which can be found at www.cms.gov.
Can I rely on Medicaid for my Long Term Care?
Medicaid is the state administered, Federal Government funded program that pays for healthcare for Americans who meet the poverty guidelines. In addition to doctor visits, hospital stays and other standard medical expenses, Medicaid pays for about half of the nursing facility costs in the U.S. and some home care costs, for people that qualify based on very limited assets and income.
The qualification for Medicaid assistance varies by state, but generally you may keep only the house in which your spouse or dependent lives, standard household furnishings, one car, a burial plot and funeral funds, and a small amount of cash assets (approximately $2,000 depending on the state). There are rules for the spouse to retain their separate income and half the countable assets up to a limit. When Medicaid pays for your care, you also do not have much control over choosing the facility that will provide you care.
Note: This information is very general and not meant to provide legal or Medicaid qualification advice. Please refer to your local Medicaid office for state specific rules which can be accessed through www.medicaid.gov.
Can I get LTCI Insurance through my Employer?
The fastest growing segment in the Long Term Care Insurance market over the last several years is Employer Sponsored programs offering LTCI to Employees at the worksite. The number one most requested new supplemental employee benefit is Long Term Care Insurance.
There are advantages for both Employees and Employers when LTCI is offered at the worksite.
Employees:
- Easier access to quality insurance programs
- Premium discounts
- Available to parents and other family members
Employers:
- Competing for the best employees
- Helping prevent employee’s lost work time due to care-giving responsibilities
- Compensating key people
If you work at a company that does not include LTCI in your supplemental benefits package, or if you are an Employer that would like to learn what having LTCI in your benefits package can mean to your company.
How are LTCI benefits paid?
Today’s Long Term Care policies pay benefits based mainly on one of three benefit payment methods.
Reimbursement
The majority of policies pay benefits based on a reimbursement method. With reimbursement benefits, the insurer will pay (or reimburse) the actual charges incurred for LTC services up to the maximum daily or monthly maximum stated in the policy. Provider bills are generally required. Benefit payments may be made to the service provider or directly to the insured for out-of-pocket expenses. If the patient is in a facility, arrangements can be for the insurance company receive invoices from and make payments directly to the facility. This benefit payment method usually involves more paperwork for the insured or service provider, but is also generally lower premium all other things being equal.
Indemnity
With indemnity benefits, the insurer pays the full amount specified in the policy when any services are provided, regardless of the cost of the service.
Cash
Cash benefits can be paid directly to the insured, typically for up to a portion of the maximum monthly benefit. Cash benefits can typically be used by the insured for any reason, including paying unlicensed family members of friends.
What do LTCI policies cover?
As noted previously, LTCI policies can be chosen to only cover Home and Community based care, or to only cover Facility care, but by far the most commonly purchased LTCI policies today provide comprehensive coverage. A comprehensive policy can pay for long term care costs through the entire “Continuum of Care”, covering care and services in a wide range of settings and for a multitude of needs. Comprehensive coverage typically includes:
- Care delivered in the insured’s home, including skilled nursing care and personal care (many policies also cover some level of homemaker services as well as personal services).
- Adult day care centers
- Respite care for care-givers
- Assisted living facilities
- Memory care centers
- Skilled nursing facilities
- Hospice care
Comprehensive policies cover all levels of custodial, intermediate and skilled care:
Custodial Care
Custodial Care primarily means assistance with the Activities of Daily Living, or "stand-by" assistance for those with cognitive impairment that need supervision but may still be able to physically perform their ADLs. It is designed to meet the personal needs (as opposed to medical needs) of the recipient, and is intended to support an existing level of health and well-being and to help prevent its further decline.
Intermediate Care
Intermediate Care is delivered under a doctor’s supervision but is not considered continuously medically necessary. It includes nursing and rehabilitative care required only part-time or occasionally and is performed by skilled practitioners, such as administering medications or physical therapy.
Skilled Care
Skilled Care is provided in a skilled nursing facility and is continuously medically necessary. It is a relative high level of nursing and medical care delivered by RNs, LVNs, or LPNs, for those whose conditions require ongoing and close monitoring.
What do LTCI policies not cover?
LTCI policies, like most insurance, contain some coverage limitations and exclusions. Generally, LTC policies do not cover care required as a result of these conditions:
- Alcohol or drug addiction
- Acts of war
- Self-inflicted injury or attempted suicide
- Some mental and nervous disorders
Pre-existing Conditions Coverage
When medical advice or treatment within the last six months is disclosed on the policy application (which it would have to be), the company decides in their underwriting process whether to issue the policy or not, knowing about that preexisting information. If they issue the policy with that preexisting information disclosed, the condition would be covered from day one. If the company chooses not to cover the disclosed pre-existing condition, typically the company would either decline to issue the policy or postpone the issue of a policy for a specified period of time for the condition to resolve itself, at the end of which a new application could be made to the company.
Family or Friends Providing Care
Most policies do not pay for an unlicensed family member or friend to provide care. For a family member to be compensated by benefits from reimbursement policies, they typically must become a licensed care-giver and work through a licensed care-giving vendor that receives the payments from the insurance company. Some policies provide a “Cash Benefit” by way of a rider (see "How are LTCI benefits paid" above) which can be used for any reason, including paying an unlicensed family member. The definitions for exactly who other than licensed care-givers can provide care and be paid from policy benefits varies significantly, and the policy language should be closely examined.