INSURANCE >> LONG TERM CARE

What is Long Term Care (LTC)?

LTC is often referred to as nursing home care; however, LTC encompasses a wide array of medical, personal and environmental services. These services are provided to patients who are chronically ill, aged or disabled, in an institution or in their home. Convalescent physical supportive or restorative services are required on a long term basis, normally more than 90 days. Typically, patients receiving LTC are not in an acute phase of an illness.

Should I consider Long Term Care (LTC) Insurance?

Studies show that one out of every two people, age 65 and older, will require some type of long-term care in their lifetime. This usually entails a nursing home stay.

When is the right time to buy? Like any type of insurance, you must be able to qualify for coverage. In addition, the majority of policies have a waiting period for preexisting conditions. Do not wait until you are diagnosed with a serious illness to consider long term care coverage. If you currently require assistance with daily living activities, oxygen, a wheelchair, dialysis etcetera; long-term care insurance is not a viable option. Click here for LTC provider information.

Do I need it? The average cost of a nursing home on an annual basis is $30,000! And in larger metropolitan areas, the cost can sky rocket to $60,000+. Combined with your regular expenses; savings will quickly dwindle until you have little or nothing left. Long-term care insurance is your best protection.

Long term care insurance policies can be very expensive. It is very typical for a husband and wife at age 65 to pay around $7,000 in annual premiums. The general rule of thumb? Never purchase a policy with premiums that exceed 5% to 7% of your annual income.

What about Medicare and Medicaid?

Medicare does not offer long-term care benefits! In select cases, Medicare will cover the costs of some skilled nursing care, nursing homes or home health care. However, this benefit is limited to short-term care associated with a specific illness or injury.

Medicaid requirements vary from state to state. Generally, you must meet federal poverty guidelines, which requires you to 'spend down' all of your assets. Additionally, you will be required to utilize a Medicaid facility for your care.

After casting Medicare and Medicaid into their appropriate roles, be aware that if you have a strong desire to choose your own nursing home facility - long-term care insurance may be your best solution!
This statement is not applicable to my life:

Long term care insurance is generally not an option, when social security is your primary source of income. If you are finding it difficult to pay for essentials, such as food, medicine and utilities, then typically you will be able to take advantage of Medicaid benefits. Medicaid serves as a federal-state program that currently covers medical and long-term care costs, for those with limited financial reserves.

How Much Does Medicare Pay? Unfortunately, one of the most common myths about Medicare is that it pays for nursing home expenses. In actuality, Medicare pays a limited amount towards the cost of long term nursing care, and then only under strict guidelines. In order to receive Medicare benefits, a patient must receive skilled care in a Medicare-approved facility after a hospital stay of at least 3 consecutive days (72 hours) within 30 days before entering a nursing home. The care must be designed to assist the patient in becoming well, rather than help with personal needs or custodial care on a long term basis.

Assuming all the above requirements are met, Medicare still pays only the first 20 days of nursing home care in full. The next 80 days require that the patient pay a co-payment. The cost in 1999 was $96 per day. Once the 80 days have expired, Medicare pays nothing. This translates into 100 days of Medicare benefits, then the patient and his/her family are left with no coverage. Sadly, the average stay in a nursing home is 2.5 years. This statistic clearly eliminates Medicare as a solution to long-term care costs.

Medicaid, unlike Medicare, does pay for custodial nursing home care designed to help those requiring assistance with the activities of daily life. However, because Medicaid is a 'means-tested" program, one must be essentially impoverished in order to qualify for benefits: no income and no assets.

Many have attempted to circumnavigate this delimitation by redistributing their resources to family members, but new legislation has presented a serious roadblock. Elderly Medicaid applicants are restricted from "giving away" their assets in order to qualify for Medicaid benefits. Additionally, any person who advises an individual to transfer resources for the purposes of qualifying for Medicaid may be subject to criminal penalties.

Finally, consider this: Medicaid, not the patient or the family, decides the applicant's nursing home. A patient is assigned to the nearest available bed, in a nursing home that may be far from loved ones.

At My Twin Cities Home we will search a variety of companies to try to get you the best policies for your needs. We work with lots of different providers so you have a great selection of what is available in the marketplace.