Frequently Asked Questions

1. What is long term care?

Long term care involves a wide variety of services for people with a prolonged illness, disability or cognitive disorder (such as Alzheimer's disease). Long term care is not one service, but many different services aimed at providing people with the help they need when a prolonged illness or disability keeps them from being able to care for themselves. It can range from help with day-to-day activities in the home (custodial care such as dressing, preparing meals, bathing, etc. ) to more sophisticated services such as skilled nursing care in your home or a nursing facility. Persons with physical illnesses or disabilities often need hands-on-assistance with activities of daily living. Persons with cognitive impairments generally need supervision, protection or verbal reminders to accomplish everyday activities. Skilled care and personal care remain the most common terms used to describe long-term care and the level of care a person may need.

Skilled care is generally needed for medical conditions that require care by skilled medical personnel, such as registered nurses or professional therapists. This care is usually provided 24 hours a day, is ordered by a physician, and involves a treatment plan. Skilled care is generally provided in a nursing home, but may also be provided in other settings such as the patient's home with help from visiting nurses or therapists.

Personal care (also known as custodial care) helps a person perform activities of daily living, which include assistance with bathing, eating, dressing, using the toilet, continence and transferring. It is less intensive or complicated than skilled care and can be provided in many settings, including nursing homes, adult day care centers or at home.

2. Why should you consider long term care insurance?

If you're like most consumers, you've set aside money for a rainy day. But you probably haven't protected your savings against the expense of an extended illness or disability. You should take action now, because the likelihood of needing such long term care is significant and the cost is high. A study reported by the New England Journal of Medicine anticipates that 43% of people over age 65 will enter nursing facilities during their lifetime. More than half of the people in a nursing facility stay more than one year. Currently, the cost of a year in a nursing home averages about $38,000. In addition to nursing facilities, many people will need long term care services in their home, or community services in adult day care centers. It has estimated that 80% of all people age 65 will need either nursing facility services or home or community services during their lifetime.

Long term care insurance is the most efficient means of protecting your assets from this threat. When you purchase a long term care insurance policy, you not only help safeguard your assets from the cost of long term care, but you increase your independence and control over future needs.

3. Who pays for long term care?

Nationally, one third of all nursing home expenses are paid out-of-pocket by individuals and their families, and about half are paid by state Medicaid programs. Medicare, Medicare Supplement Plans, Medicare HMO's and traditional health insurance plans are designed to pay for hospital and doctor costs, not to pay for long term care services. In fact, Medicare pays only about 10% of all long term care costs (including only 5% of all nursing facility expenses). A study performed by the Health Care Financing Administration, which administers Medicare, showed that the majority of nursing facility costs are paid with the personal assets of the individual receiving the care, or by Medicaid if the individual had no personal assets. To receive Medicaid assistance, you must meet federal poverty guidelines for income and assets on health care. When you have spent down your assets, you then will be eligible for Medicaid. Thus, many people begin paying for nursing home care out of their own pockets and are forced to spend down their financial resources until they become eligible for Medicaid.

4. How much does long term care cost?

If you don't have insurance, the cost of custodial care can be prohibitive, depending upon the amount and type of care needed and the setting in which it is provided. Currently, the cost of a year in a nursing home averages about $38,000. This cost is only an average and varies widely across the country. If you receive skilled nursing care in your home and are visited by a nurse three times a week for two hours per visit for the entire year, the bill would come to about $12,300. If you receive personal care in your home from a home health aide three times a week for a year, with each visit lasting two hours, the bill would amount to about $8,400.

5. I don't think I can afford long-term care insurance.

I believe that if you don't get LTC insurance right now, you probably never will. The premiums will never be lower. Fifteen years from now the care you may need could cost you $100,000, and 30 years from now it could cost $200,000 a year. It makes sense to buy a reasonably-priced LTCI policy from a solid company and remove the enormous financial risk.

6. I think I'll wait a while before I make that decision (the delay).

I use cost-of-waiting illustrations, and I use software that shows the economic impact. Especially with younger people, purchasing now for less money and paying less over time makes more sense, and generally guarantees insurability.

7. I'm too young to think about this.

The statistics show that of the 12.8 million people who need help with everyday activities, almost 40% (5.2 million) are working-age adults ages 18 to 64.

8. In my family, all die from heart attacks and strokes, usually in their sleep.

In previous generations, people did die quickly. Today, medical technology keeps people from dying from acute conditions and people live longer. Without protection, this care is provided by the federal health care system (Do you want the DMV to be your health care provider, i.e. Medicare, Medical).

9. I don't think I'll ever need long-term care (the denial).

The statistics show that you have a 50% chance of needing long-term care at some point in your life. The 50% of people who will need LTC or the 50% who will not?

10. Why do people purchase Long Term Care Insurance?

As with any insurance, this insurance protects your assets. In addition, it gives you control over where you receive your care. People who want home care need to understand LTC insurance is your only option. Preserving your current lifestyle is a common reason. To relieve friends and family from the burdens of taking care of you is also a major reason. The best reason is probably that it allows you to control your own future, rather then having to rely on others.

11. Why would rich people end up in a nursing home?

There are two reasons. Assets are quickly depleted. Heirs to your estate have a financial incentive to put you into a nursing home just to save their inheritance! It is unethical, but legal, for someone with power of attorney to take over your assets. They, then put you into a nursing home, pay the cost for three years, then put you on Medicaid!

12. How much does this insurance cost?

It depends on a lot of different factors. The optimal insurance policy will differ from person to person. By clicking on the "free quote" button, I will review your input and respond.

13. How do I know I will in fact get "the best price"?

I list the companies I consider in my analysis for all to see. By clicking on the "products" button, you may view the companies.

14. I already have Health Insurance. Why do I need this?

Health insurance pays for doctors, medical tests, drugs, and hospital costs. Temporary recooperative skilled homecare is covered. A chronic illness is a long-term expense that is not covered by health insurance. If home care of a permanent nature is your choice, long-term care insurance is your lowest cost and best care option.

15. If I, my spouse, parent and parent-in-law apply, do I receive an additional discount?

It is not necessary for you, your spouse, parents or parents-in-law to select the same benefit level. Each applicant should choose the option that best fits his/her needs.

16. Do my spouse and I need to fill out separate applications?

You and spouse need to complete and sign individual applications. Each application is considered and processed separately.

17. Can I choose which nursing home I wish to enter?

You may enter any facility / board and care / assisted care / nursing home of your choice, in any part of the United States, Canada, U.S. possessions, and many parts of the world.

18. What types of services are covered under the home health care portion of the policy?

Home health care provides home nursing care by an RN, LPN, or LVN, or services provided by home health aides who are certified or employed through qualified home health agencies, physical, respiratory, occupational, or speech therapy, and nutritional counseling, by or under the supervision of a qualified home health agency.

19. What about HMO's and other medical plans?

Most HMO's and medical plans offer protection for acute medical care and other short-term needs. Some medical plans may offer limited skilled nursing care as a continuation of acute care. Such coverage is not designed for services received on a long-term basis. The Long-Term Care Insurance policy provides coverage for services when they are provided for an extended period of time and are not associated with acute care or short-term illnesses.

20. Will my premiums increase in the future?

Your premiums will not increase because you grow older, become ill, or use your benefits. Your premium will be adjusted only if the premiums are adjusted for everyone in your class or group.

21. If my spouse and I select the same benefit level, will I pay the same premium?

Each person's issue age is used to determine the amount of premium. Although you and your spouse selected the same benefit level, your premium would be calculated on your issue age and your spouse's premium would be calculated on his or her issue age. Issue age is your age on your last birthday.

22. What expenses are covered in a nursing home?

The policy provides coverage for all levels of nursing home care including: skilled, intermediate and custodial nursing care.

23. Do you need to be hospitalized prior to receiving LTC benefits?

You do not need to be hospitalized first to become eligible for long-term care benefits. You need to be certified for benefits and complete the Qualification Period in order to be eligible to receive benefits for covered charges.

24. What costs associated with nursing home care will Medicaid cover?

Medicaid has limited resources to pay for long-term care since those receiving long-term care through Medicaid are competing for funds with other Medicaid recipients receiving other types of services. There are strict waiting periods between asset transfer and application for benefits and to become eligible you have to spend down assets to government required levels. In most states reimbursement is only available for care received in Medicare/Medicaid approved facilities.

25. What does Medicare pay for Nursing Home Care?

Medicare was designed to pay for acute medical conditions and rehabilitative care, and was never intended to pay for costs associated with chronic care. To qualify for nursing home care under Medicare, a three-day hospital stay is required, care must be rehabilitative in nature, and skilled nursing care provided. If these conditions are met, Medicare will pay for the first 20 days in full. Days 21-100 require a copayment. There is no coverage after day 100.

26. Do you have other questions about long-term care?

Please e-mail me with further questions about long-term care insurance. Click here to email me.