Long Term Care

What is long term care? Long term care provides benefits when you are unable to do a certain number of activities of daily living, such as dressing, walking and eating, or when you are cognitively impaired. Long term care provides a mix of supportive and medical services, and can be delivered in a variety of places, including a skilled nursing facility, assisted living facility, adult day care center, and/or home. Generally, services should be delivered in the "least restrictive" environment—one that corresponds to your needs.

What about Medicare?
Many individuals incorrectly assume that Medicare will cover most of their long-term care costs. In fact, Medicare pays very little of all long-term care costs. Its not recommended that you rely on Medicare to pay for your long-term care needs. Medicare covers only the following long-term care services: Skilled Nursing Facility Benefit: After you have been in a hospital for at least three days, Medicare may pay for your care while you recover in a certified skilled nursing facility. It will only pay up to 100 days, and you are responsible for a daily co-payment for every day in the nursing home between the 21st and the 100th day. Home Health Benefit: if you are confined to your home, require skilled care for an injury or an illness and meet other specific criteria, Medicare can pay in full for services provided by a Medicare certified home health care agency. Your doctor must determine that you need home health care and set up a plan of care for you. Medicare does not cover personal care services, such as assistance with dressing and bathing, unless you are homebound and are also getting skilled care such as nursing or therapy. Any covered personal care must also relate to the treatment of an illness or injury and you can only get a limited amount of personal care in any week. Additionally, if you purchase a private Medicare supplement plan (also called Medigap plan) or enroll in a Medicare HMO plan, these plans will usually not pay for long-term care services that are not covered by Medicare. In Massachusetts, Medicare supplement policies do not cover long-term care costs, but Medicare Supplement 1 and Medicare Supplement 2 policies do pay for the co-payments for 21 through 100 for Medicare-approved stay in nursing homes.

What is long term care insurance?

Essentially, long term care covers expenses not paid for by traditional insurance, Health Maintenance Organizations, or Medicare. It enables people to protect their assets without having to transfer or deplete them to qualify for Medicaid. Long term care insurance is available in the private market, and usually provides a fixed benefit for a specific time period. Policies vary by daily benefit maximum, inflation protection, choice of service site (home or skilled nursing facility), requirements for prior hospitalization, and cancellation features. Some policies will refund the premiums paid if the policy is cancelled and some will not.

What determines what long term insurance will cost?
The main determining factors are:

Age - The risk generally increases as you get older.
Marital Status - Single people are more likely to need care from a paid provider.
Gender - Women are at a higher risk than men, primarily because they tend to live longer.
Lifestyle - Poor diet and/or exercise habits can increase your risk.
Health and family history also impact your risk. What aspects of the policy will affect the monthly premium? The daily benefit (which may range from $50 to $500 per day), variable benefits depending upon the site of care, maximum benefits, site of long term care services, and inflation protection.
Specifically, the higher the daily benefit, the more expensive the long term care insurance.
Receiving services in your home will cost 60 to 75 percent of the cost of skilled nursing facility care.
Benefits that are for the remainder of your lifetime are generally more expensive than a fixed dollar amount or specific number of years.
Flexibility in the place where benefits are received, called comprehensive policies, is usually more expensive than just one site, such as a skilled nursing facility.
Insurance with inflation protection is important given that health costs have been increasing faster than the general rate of inflation for the past several years.

What are the risks and benefits of long term care insurance?

The risk of purchasing long term care insurance is that a premium will be paid for a number of years or decades and no benefits will be received because you don't require long term care services. In this situation, you are paying for peace of mind. The benefit is coverage of long term care services if they are needed. At age 40, I assessed my situation as an active, healthy female with family longevity and decided to purchase group long term care insurance when it was offered by my employer. If I live to 95 years, the investment will be $45,000 over 55 years-much less expensive than one year in a nursing home!

Contact Denise J. Boisvert for more details on long term care insurance.

Click here to learn more about other financial services provided by Denise J. Boisvert & Associates, Inc.

Denise J. Boisvert & Associates
P.O. Box 70615
Dartmouth, MA 02747
Phone: 508-998-3221

Fax: 508-998-3244
Email: info@denisejboisvert.com

Website:
www.denisejboisvert.com

www.stressfreeretirement.com