Listen to internet radiowith
Paul Petillo of Target2025.com/BlueCollarDollar.com
on
at Blog Talk Radio
Showing posts with label LTC insurance. Show all posts
Showing posts with label LTC insurance. Show all posts
Tuesday, October 18, 2011
Should Long-Term Care Insurance be a Consideration?
On Monday's Financial Impact Factor Radio we had a guest of interest to all Boomers. Jesse Slome of American Association for Long-Term Care Insurance joined us to teach us about LTCI. This is a multi-faceted topic that has long-range implication for the near retiree and their retirement planning strategies as well as someone who is already retired. Jesse was nice enough to stop by and explain many of the nuances of this product and offer some helpful tips on what to look for when buying long-term care insurance, where to purchase it and when.
Thursday, December 6, 2007
Retirement Planning, Long-Term Care Insurance and Lying
Carl Sagan once said: “One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. The bamboozle has captured us. Once you give a charlatan power over you, you almost never get it back.”
The lie. As we continued our discussion about insurance and retirement planning, we are faced with falsehood. In all fairness, insurance companies are not necessarily liars but without a good indication of what the truth is, you have little hope in distinguishing whether or not what you are being told is true.
Oddly, the insurance industry feels just as strongly about you. Long-term care insurance, a policy that is bought well in advance of actual use, and sometimes by folks who trust that the policy they purchase is the right one for them, are often denied the claims they make and for reasons that seem to the average eye, simply minutiae.
“Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” Demosthenes
In the book I wanted to emphasize the possibility that LTC insurance sales people were not as truthful about the product they are selling. I wrote “Back in 1965, noted psychologist/anthropologist Paul Ekman believed that human facial expressions were individual and not the result of some sort of evolutionary step that made the message we portray on our faces somehow universal.
Darwin published his work “The Expression of Emotion in Man and Animals” in 1872. The work suggested that particular emotions are attached to particular expressions in humans and in principle, to animals. What Darwin failed to understand was the nature of the falsehood. In fact, Darwin gave but one reference to the subtle art of deception when he wrote: “They [the movements of expression] reveal the thoughts and intentions of others more truly than do words, which may be falsified”.
Margaret Mead disagreed with Darwin suggesting that expressions were a result of culture not some universally inherited trait. This led Mr. Ekman on a worldwide journey to find the truth about what would later be a blueprint for falsehood. He showed pictures of faces experiencing a variety of emotions to a wide variety of people around the world and recorded their reactions.
But the experiment, he realized after a time was flawed. The people he had hoped would show some sort of innate reaction, one that was universal had been tainted by their contact with the outside world. Because, even in 1965, the world had shrunk considerably, many of his test subjects had seen Charlie Chaplin or John Wayne and understood what those faces meant. He needed to find subjects who were untouched by outside influences, a peoples who were technologically remote. He found just such a group in Papua, New Guinea.
Mr. Ekman found that there was a certain universality to how we express ourselves, confirming what Darwin suggested. From his study this remote tribe, he found that anger, disgust, fear, joy, sadness and surprise were universal expressions developed without outside influences. The ultimate goal: how to find out if someone was lying. He never, at least to my knowledge, applied his study of those 43 facial muscles, the ones that offer telltale glimpses into truth and lies to that of the insurance industry.
“Falsehood is easy, truth so difficult.” George Eliot
The reason you should be as skeptical as I am of this particular corner of the insurance industry has less to do with its relative newness as a product but rather with its aggressive selling by the industry. When a product comes to market, it is always promoted to the widest audience available. It is not different with insurance.
Trouble is, we only come face-to-face with an agent who represents a company and a product and that product is something we might not need in the near future. Long-term Care insurance is bought on good faith, research and soul-searching” and because of the time an effort most of us put into the purchase, we expect it perform flawlessly.
A large number of the claims the companies denied were due to paperwork not filled out properly or the right forms were not submitted. They also cited denial of claims were a result of the facilities the clients chose for care were not appropriate or acceptable for nursing care – although all of the people who had filed complaints had used state licensed facilities.
This is cause for concern among current and future policyholders. If Congress can offer incentives such as tax breaks to the industry to encourage people to buy the product, federal oversight may be necessary. This would take the industry’s current overseer, the state, out of the regulation game.
Even as states begin their own market investigations into the practice of long-term care, it adds another layer of concern about whether this industry is too young to be an important part of your retirement planning.
“Always tell the truth. That way, you don't have to remember what you said.” Mark Twain
The lie. As we continued our discussion about insurance and retirement planning, we are faced with falsehood. In all fairness, insurance companies are not necessarily liars but without a good indication of what the truth is, you have little hope in distinguishing whether or not what you are being told is true.
Oddly, the insurance industry feels just as strongly about you. Long-term care insurance, a policy that is bought well in advance of actual use, and sometimes by folks who trust that the policy they purchase is the right one for them, are often denied the claims they make and for reasons that seem to the average eye, simply minutiae.
“Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” Demosthenes
In the book I wanted to emphasize the possibility that LTC insurance sales people were not as truthful about the product they are selling. I wrote “Back in 1965, noted psychologist/anthropologist Paul Ekman believed that human facial expressions were individual and not the result of some sort of evolutionary step that made the message we portray on our faces somehow universal.
Darwin published his work “The Expression of Emotion in Man and Animals” in 1872. The work suggested that particular emotions are attached to particular expressions in humans and in principle, to animals. What Darwin failed to understand was the nature of the falsehood. In fact, Darwin gave but one reference to the subtle art of deception when he wrote: “They [the movements of expression] reveal the thoughts and intentions of others more truly than do words, which may be falsified”.
Margaret Mead disagreed with Darwin suggesting that expressions were a result of culture not some universally inherited trait. This led Mr. Ekman on a worldwide journey to find the truth about what would later be a blueprint for falsehood. He showed pictures of faces experiencing a variety of emotions to a wide variety of people around the world and recorded their reactions.
But the experiment, he realized after a time was flawed. The people he had hoped would show some sort of innate reaction, one that was universal had been tainted by their contact with the outside world. Because, even in 1965, the world had shrunk considerably, many of his test subjects had seen Charlie Chaplin or John Wayne and understood what those faces meant. He needed to find subjects who were untouched by outside influences, a peoples who were technologically remote. He found just such a group in Papua, New Guinea.
Mr. Ekman found that there was a certain universality to how we express ourselves, confirming what Darwin suggested. From his study this remote tribe, he found that anger, disgust, fear, joy, sadness and surprise were universal expressions developed without outside influences. The ultimate goal: how to find out if someone was lying. He never, at least to my knowledge, applied his study of those 43 facial muscles, the ones that offer telltale glimpses into truth and lies to that of the insurance industry.
“Falsehood is easy, truth so difficult.” George Eliot
The reason you should be as skeptical as I am of this particular corner of the insurance industry has less to do with its relative newness as a product but rather with its aggressive selling by the industry. When a product comes to market, it is always promoted to the widest audience available. It is not different with insurance.
Trouble is, we only come face-to-face with an agent who represents a company and a product and that product is something we might not need in the near future. Long-term Care insurance is bought on good faith, research and soul-searching” and because of the time an effort most of us put into the purchase, we expect it perform flawlessly.
A large number of the claims the companies denied were due to paperwork not filled out properly or the right forms were not submitted. They also cited denial of claims were a result of the facilities the clients chose for care were not appropriate or acceptable for nursing care – although all of the people who had filed complaints had used state licensed facilities.
This is cause for concern among current and future policyholders. If Congress can offer incentives such as tax breaks to the industry to encourage people to buy the product, federal oversight may be necessary. This would take the industry’s current overseer, the state, out of the regulation game.
Even as states begin their own market investigations into the practice of long-term care, it adds another layer of concern about whether this industry is too young to be an important part of your retirement planning.
“Always tell the truth. That way, you don't have to remember what you said.” Mark Twain
Monday, November 5, 2007
Questions: 11-18: Retirement Planning and Long Term Care: Eighteen Questions
Many policies have their own set of requirements. It is important to know when and how these criteria will be enforced. I’m skeptical of many of these qualifications. Policies issued now may have a wholly new set of hoops to jump through when the actual time you make a claim comes around. But asking the question now and including your agents (signed answers) can be helpful when you do make a claim twenty years from now.
11. Ask your agent if this policy requires the following questions to be asked if you put a claim in for nursing home care:
* An assessment of activities of daily living?
* An assessment of cognitive impairment?
* Physician certification of need?
* A prior hospital stay?
Other?
How will your potential policy cover the need for home health care:
* An assessment of activities of daily living?
* An assessment of cognitive impairment?
* Physician certification of need?
* A prior hospital stay?
* Other?
12. Surprisingly, or maybe not, insurance companies may have a small loophole built into the policy that you may not be aware of when doing your comparisons. For instance, does this policy require a prior nursing home stay for home health care coverage?
* Yes
* No
13. Once the policy is written and signed, it cannot be changed. The language is set in stone so to speak. This also should apply to the cancellation policy. If you are on good terms with the insurer, your policy should be guaranteed renewable. It may be, but ask anyway. Is the policy guaranteed renewable?
* Yes
* No
14. We have discussed some of the optimum years for getting these policies. Do it before your birthday and if possible, do it during your fifties or earlier. Here is an example of several policy quotes I received from the Federal Long term Insurance Program.
Because I am not eligible (I am not, as the site says, a Federal family), I used their calculator to determine several options. All of the policy quotes I received were based on three years of coverage, a ninety day waiting period, a daily benefit of $100, $200, and $300, comprehensive coverage (which includes both nursing and home care) and inflation protection. Here is what I found out based on my age (49 at the time of this writing), one year later, and if I had applied ten years later.
On the $100 benefit at age 49, I would pay $60.01 a month and receive a lifetime benefit of $109,500, at a daily benefit of $200, my premium and my maximum benefit would increase by twice; at a $300 daily benefit, I would pay $180.
Waiting a year until after my fiftieth birthday, I would be making slightly higher premium payments of about $4 – 8 a month. But if I waited until I was 59 to purchase the policy, the policy premium on a $100 daily benefit would increase to $89.47, at $200, it would double and if I wanted a $300 day benefit coverage, my monthly outlay would be over $265.
Ask your insurer for their insurable age ranges. It is important to understand what kind of insurance pool you are jumping into. If there is a cut-off date, this might be prove to be beneficial in terms of what kind of people are participating. If they offer a lengthy cut-off date, they may be filling the coffers with policies, many of which they will paying out on soon.
What is the age range for enrollment?
15. It is possible that your policy will no longer require you to pay the premium once the policy is activated. Find out if there is there a waiver-of-premium provision and how long must you be confined before the waiver begins?
For nursing home care
For home health care
16. The inflation portion of the policy is important and may cost you extra. Does the policy offer an inflation adjustment feature as a regular part of the policy or as a rider? And if they do:
What is the rate of increase? $ _________
How often is it applied? $ _________
For how long?
Is there an additional cost? $ _________
17. Policies can offer discounts depending on how you pay your premiums. Often, there is as much as nine percent discount if you pay the premium in full on an annual basis. Be sure to ask if you can receive any additional discounts if the money is electronically transferred. Once all of these things are asked of the insurance company, don’t expect a clear-cut view of all of the costs. But you will be able to get a general idea of what the policy will cost you and whether you can afford it.
What does the policy cost?
Per year $ _________
With inflation feature: $ _________
Without inflation feature: $ _________
(get it regardless of the cost savings that might be shown)
Per month $ _________
With inflation feature: $ _________
Without inflation feature: $ _________
18. Most policies come with a period of cancellation. You may have second thoughts. You may find, if you read further in the book, that there may be another option available for those who are diligent enough to pursue the alternative. Ask your agent if there is there a 30-day free look?
* Yes
* No
11. Ask your agent if this policy requires the following questions to be asked if you put a claim in for nursing home care:
* An assessment of activities of daily living?
* An assessment of cognitive impairment?
* Physician certification of need?
* A prior hospital stay?
Other?
How will your potential policy cover the need for home health care:
* An assessment of activities of daily living?
* An assessment of cognitive impairment?
* Physician certification of need?
* A prior hospital stay?
* Other?
12. Surprisingly, or maybe not, insurance companies may have a small loophole built into the policy that you may not be aware of when doing your comparisons. For instance, does this policy require a prior nursing home stay for home health care coverage?
* Yes
* No
13. Once the policy is written and signed, it cannot be changed. The language is set in stone so to speak. This also should apply to the cancellation policy. If you are on good terms with the insurer, your policy should be guaranteed renewable. It may be, but ask anyway. Is the policy guaranteed renewable?
* Yes
* No
14. We have discussed some of the optimum years for getting these policies. Do it before your birthday and if possible, do it during your fifties or earlier. Here is an example of several policy quotes I received from the Federal Long term Insurance Program.
Because I am not eligible (I am not, as the site says, a Federal family), I used their calculator to determine several options. All of the policy quotes I received were based on three years of coverage, a ninety day waiting period, a daily benefit of $100, $200, and $300, comprehensive coverage (which includes both nursing and home care) and inflation protection. Here is what I found out based on my age (49 at the time of this writing), one year later, and if I had applied ten years later.
On the $100 benefit at age 49, I would pay $60.01 a month and receive a lifetime benefit of $109,500, at a daily benefit of $200, my premium and my maximum benefit would increase by twice; at a $300 daily benefit, I would pay $180.
Waiting a year until after my fiftieth birthday, I would be making slightly higher premium payments of about $4 – 8 a month. But if I waited until I was 59 to purchase the policy, the policy premium on a $100 daily benefit would increase to $89.47, at $200, it would double and if I wanted a $300 day benefit coverage, my monthly outlay would be over $265.
Ask your insurer for their insurable age ranges. It is important to understand what kind of insurance pool you are jumping into. If there is a cut-off date, this might be prove to be beneficial in terms of what kind of people are participating. If they offer a lengthy cut-off date, they may be filling the coffers with policies, many of which they will paying out on soon.
What is the age range for enrollment?
15. It is possible that your policy will no longer require you to pay the premium once the policy is activated. Find out if there is there a waiver-of-premium provision and how long must you be confined before the waiver begins?
For nursing home care
For home health care
16. The inflation portion of the policy is important and may cost you extra. Does the policy offer an inflation adjustment feature as a regular part of the policy or as a rider? And if they do:
What is the rate of increase? $ _________
How often is it applied? $ _________
For how long?
Is there an additional cost? $ _________
17. Policies can offer discounts depending on how you pay your premiums. Often, there is as much as nine percent discount if you pay the premium in full on an annual basis. Be sure to ask if you can receive any additional discounts if the money is electronically transferred. Once all of these things are asked of the insurance company, don’t expect a clear-cut view of all of the costs. But you will be able to get a general idea of what the policy will cost you and whether you can afford it.
What does the policy cost?
Per year $ _________
With inflation feature: $ _________
Without inflation feature: $ _________
(get it regardless of the cost savings that might be shown)
Per month $ _________
With inflation feature: $ _________
Without inflation feature: $ _________
18. Most policies come with a period of cancellation. You may have second thoughts. You may find, if you read further in the book, that there may be another option available for those who are diligent enough to pursue the alternative. Ask your agent if there is there a 30-day free look?
* Yes
* No
Questions: 4-10: Retirement Planning and Long Term Care: Eighteen Questions
As we continue our discussion about LTC coverage and what it covers, comparisons become more difficult. The next six questions will help you compare the types of coverage available
Compare how long your policy will cover the following:
A stay in a nursing home
If you need care at home
4. To determine what you maximum lifetime benefit is, simply multiply your daily benefit times the number of days you are covered. For instance, in the chart below, a policy with a daily benefit of $100 payable for three years will pay out $109,500 in benefits ($100 x 3years=$109,500 – this lifetime benefit is not reflective of inflation increases). Once again, the length of time you choose for your policy and the waiting period have an effect on your maximum lifetime benefit.
What does your policy offer?
For nursing home care $ _________
For home health care $ _________
5. Does the policy have a maximum length of coverage for each period
of confinement?
For nursing home care
For home health care
6. Like many policies that have a wide swath of unknown territory to deal with, such as LTC policies, there is generally a waiting period before the policy kicks in. Because Medicare covers the first one hundred days, many LTC policies do not begin before 90 days. You can request a shorter waiting period but the monthly premium is often prohibitively higher. Ask your agent how long you must wait before a preexisting condition is covered?
7. How long must I wait before benefits begin?
For nursing home care
For home health care
8. In almost all standard policies, Alzheimer's disease and other organic mental and nervous disorders are not covered. That’s not to say you cannot get these coverages added. One of the most difficult aspects of comparing any type of insurance is gathering all of the information about what you require and allowing each policy to stand side-by-side.
Some policies have ingredients that met most but not all of your requirements while some are basic shells that can be added to based on your needs. The later types of policy type additions are called riders. Riders, in insurance parlance, add benefits at an additional cost. Among the most important aspect in an LTC policy is coverage for home health care.
When comparing policies, this should be a standard item unless of course, you live in an area where home health care may not be readily available. In such instances, a home health care option would be the standard by which to judge policies. It can be added later if your circumstances change.
Some policies will offer non-forfeiture benefits – decline them. This type of benefit is costly and unnecessary. It is offered as a rider and will be sold as something that should have been included in the policy. The non-forfeiture rider usually pays some or all of your benefits even if you no longer make premium payments. A certain amount of time must have elapsed first.
Another type of non-forfeiture rider is disguised as a return of premium. This allows you to cancel your policy and receive some of your premium payments back. Disregard such a rider or offers to add it after you have had the policy for a number of years. Often this seems enticing when estate planning is taken into consideration. You may reason that your heirs would get a return on your policy if you never used it or canceled it after a certain amount of time. The unfortunate aspect of this rider is the temptation to cancel the policy at exactly the time in your life when you are most likely to use it.
The last and probably the best rider accounts for inflation. Because the value of today’s dollars will be vastly different than dollars calculated in the future, getting some sort of inflation protection is always a good option. Try to choose an option where this protection is imbedded in the policy. If not, add it.
The question here should be, does your policy cover things like Alzheimer’s or other organic mental diseases?
* Yes
* No
9. Does your policy include inflation protection?
* Yes
* No
10. When you do your side-by-side comparison, have you included all of the possible riders and their cost to the policy?
* Yes
* No
Compare how long your policy will cover the following:
A stay in a nursing home
If you need care at home
4. To determine what you maximum lifetime benefit is, simply multiply your daily benefit times the number of days you are covered. For instance, in the chart below, a policy with a daily benefit of $100 payable for three years will pay out $109,500 in benefits ($100 x 3years=$109,500 – this lifetime benefit is not reflective of inflation increases). Once again, the length of time you choose for your policy and the waiting period have an effect on your maximum lifetime benefit.
What does your policy offer?
For nursing home care $ _________
For home health care $ _________
5. Does the policy have a maximum length of coverage for each period
of confinement?
For nursing home care
For home health care
6. Like many policies that have a wide swath of unknown territory to deal with, such as LTC policies, there is generally a waiting period before the policy kicks in. Because Medicare covers the first one hundred days, many LTC policies do not begin before 90 days. You can request a shorter waiting period but the monthly premium is often prohibitively higher. Ask your agent how long you must wait before a preexisting condition is covered?
7. How long must I wait before benefits begin?
For nursing home care
For home health care
8. In almost all standard policies, Alzheimer's disease and other organic mental and nervous disorders are not covered. That’s not to say you cannot get these coverages added. One of the most difficult aspects of comparing any type of insurance is gathering all of the information about what you require and allowing each policy to stand side-by-side.
Some policies have ingredients that met most but not all of your requirements while some are basic shells that can be added to based on your needs. The later types of policy type additions are called riders. Riders, in insurance parlance, add benefits at an additional cost. Among the most important aspect in an LTC policy is coverage for home health care.
When comparing policies, this should be a standard item unless of course, you live in an area where home health care may not be readily available. In such instances, a home health care option would be the standard by which to judge policies. It can be added later if your circumstances change.
Some policies will offer non-forfeiture benefits – decline them. This type of benefit is costly and unnecessary. It is offered as a rider and will be sold as something that should have been included in the policy. The non-forfeiture rider usually pays some or all of your benefits even if you no longer make premium payments. A certain amount of time must have elapsed first.
Another type of non-forfeiture rider is disguised as a return of premium. This allows you to cancel your policy and receive some of your premium payments back. Disregard such a rider or offers to add it after you have had the policy for a number of years. Often this seems enticing when estate planning is taken into consideration. You may reason that your heirs would get a return on your policy if you never used it or canceled it after a certain amount of time. The unfortunate aspect of this rider is the temptation to cancel the policy at exactly the time in your life when you are most likely to use it.
The last and probably the best rider accounts for inflation. Because the value of today’s dollars will be vastly different than dollars calculated in the future, getting some sort of inflation protection is always a good option. Try to choose an option where this protection is imbedded in the policy. If not, add it.
The question here should be, does your policy cover things like Alzheimer’s or other organic mental diseases?
* Yes
* No
9. Does your policy include inflation protection?
* Yes
* No
10. When you do your side-by-side comparison, have you included all of the possible riders and their cost to the policy?
* Yes
* No
Retirement Planning and Long Term Care: Eighteen Questions
As we continue to look at the possibility that retirement may not be what we envision, the conversation takes a turn to caring for that unforeseen need. Over the next three posted offerings, we will look at some important question to ask your potential insurer before you sign yourself or a loved one up for a long-term care policy of LTC.
Please note that I do discuss, at length in the book, what Medicare and Medicaid will and will not pay for and what kind of assets (or lack thereof) those programs will allow. That said, Short-term care as spelled out by Medicare requires that the following conditions must be met:
The search for LTC policies can be long and confusing. I’ve put together a small checklist of things to ask your potential agent or the one you already have. LTC policies should be compared against each other with a minimum of three side-by-side evaluations.
Here are the first of eighteen questions on the subject of Long-Term care Insurance. Additional information can be found in the book and at BlueCollarDollar.com
1. Does your policy cover the following:
* Nursing home care
* Home health care
* Adult day care
* Alternate care
* Respite care
* Other
2. Each policy differs on a pay per day basis that can make it difficult to choose. Primarily we are concerning ourselves with nursing home care. There may be other opportunities to finance some aspects of in-home care that we have yet to discuss or have only briefly touched upon (HSAs).
The policy should clearly state how much each item is paid for and whether these numbers are indexed for inflation. For the inflation number, a modest percentage of inflationary risk would be 3% year-over-year. That is however not guaranteed so, in a worst-case scenario, expect inflation to be higher, not lower twenty-years or more from now.
How much does you potential insurer pay for the following services:
For nursing home care? $ _________
For home health care? $ _________
For adult day care? $ _________
For alternate care? $ _________
For respite care? $ _________
Other? $ _________
3. How long the benefits last is an important question indeed. Medicare, as we discussed earlier, does not pay for long-term care expenses. It does cover some limited convalescent skilled nursing care and some limited home health care under restrictive, short-term conditions (see the previous chapter). One hundred days is considered the limit for this social insurance program.
The Long Term Care Insurance industry breaks down the level of care into three distinct categories. So in fact, does Medicare.
It covers only skilled nursing care. This leaves those in need of coverage for intermediate or custodial care at risk to pay out-of-pocket. This is also the most financially draining aspect of recovery for the family members, many of whom must take time off from work to take care of the recuperative patient who may not be able to complete many daily activities or ADLs.
Although there is no limit to the amount of one hundred day stays you may have at a skilled nursing facility, you must meet the criteria set forth by the Health Care and Financial Administration or HCFA, now known by its fuzzier name, The Centers for Medicare and Medicaid Services or CMS. In the fine print, you will find the exclusion of Alzheimer's or Parkinson's and the fact that Medicare, HMO's, Major Medical and Medigap insurance policies do not pay for long-term nursing home care stays.
Generally, these LTC policies last for three years. Keep in mind the “look back” period and see if your policy offering jived with the new rules of five years.
Please note that I do discuss, at length in the book, what Medicare and Medicaid will and will not pay for and what kind of assets (or lack thereof) those programs will allow. That said, Short-term care as spelled out by Medicare requires that the following conditions must be met:
- You must have been in a hospital for at least three days immediately prior to entering the nursing facility. Because the onset of most Alzheimer's and Parkinson's cases takes time to manifest themselves and generally are done without the involvement of a hospital stay, they are excluded from Medicare coverage.
You must go into the facility for the same condition for which you were previously hospitalized, and it must be within thirty days of discharge.
You must be getting better each day. Once you level off, Medicare stops paying.
The search for LTC policies can be long and confusing. I’ve put together a small checklist of things to ask your potential agent or the one you already have. LTC policies should be compared against each other with a minimum of three side-by-side evaluations.
Here are the first of eighteen questions on the subject of Long-Term care Insurance. Additional information can be found in the book and at BlueCollarDollar.com
1. Does your policy cover the following:
* Nursing home care
* Home health care
* Adult day care
* Alternate care
* Respite care
* Other
2. Each policy differs on a pay per day basis that can make it difficult to choose. Primarily we are concerning ourselves with nursing home care. There may be other opportunities to finance some aspects of in-home care that we have yet to discuss or have only briefly touched upon (HSAs).
The policy should clearly state how much each item is paid for and whether these numbers are indexed for inflation. For the inflation number, a modest percentage of inflationary risk would be 3% year-over-year. That is however not guaranteed so, in a worst-case scenario, expect inflation to be higher, not lower twenty-years or more from now.
How much does you potential insurer pay for the following services:
For nursing home care? $ _________
For home health care? $ _________
For adult day care? $ _________
For alternate care? $ _________
For respite care? $ _________
Other? $ _________
3. How long the benefits last is an important question indeed. Medicare, as we discussed earlier, does not pay for long-term care expenses. It does cover some limited convalescent skilled nursing care and some limited home health care under restrictive, short-term conditions (see the previous chapter). One hundred days is considered the limit for this social insurance program.
The Long Term Care Insurance industry breaks down the level of care into three distinct categories. So in fact, does Medicare.
It covers only skilled nursing care. This leaves those in need of coverage for intermediate or custodial care at risk to pay out-of-pocket. This is also the most financially draining aspect of recovery for the family members, many of whom must take time off from work to take care of the recuperative patient who may not be able to complete many daily activities or ADLs.
Although there is no limit to the amount of one hundred day stays you may have at a skilled nursing facility, you must meet the criteria set forth by the Health Care and Financial Administration or HCFA, now known by its fuzzier name, The Centers for Medicare and Medicaid Services or CMS. In the fine print, you will find the exclusion of Alzheimer's or Parkinson's and the fact that Medicare, HMO's, Major Medical and Medigap insurance policies do not pay for long-term nursing home care stays.
Generally, these LTC policies last for three years. Keep in mind the “look back” period and see if your policy offering jived with the new rules of five years.
Subscribe to:
Posts (Atom)