Many seniors think their Medicare comes with long-term care coverage – not so! (The only company offering this is a Medicare plan as a designed group benefit from some employers.) Most Medicare Advantage plans will offer up to 100 days of coverage (some with copays, some not), but after this time, the plans don’t pay for it.
Most Medicare Supplement plans include up to a year of continued coverage after being in the hospital for this length of time, but this is to supplement one’s lifetime reserve days, which once they’re done, they’re done.
But what is long-term care?
Long-term care is nursing home or in-home care. It’s better to buy a long-term care plan when you’re younger and healthier. Why? First, you can be declined if you’re ill and need of this coverage right away. Second, the premiums are age-related AND if you’re already sick, that’s part of the equation.
There are many variables to long-term care, besides your general health at the time of application, where you live, and certain waivers.
Long-Term Care Parts Explained
Elimination Period:
I generally use a 90-day elimination period, as many of my clients have Medicare Advantage plans, which cover their clients up to 100 days in a nursing home and the time after that becomes LTC territory. The difference between 90 days and 180 days is surprisingly only a few dollars less, so the 90 days is a good place. I understand if one were to go with a 30- or 60-day period then it goes up about $75 more a month!
Benefit Period:
The average that one is in long-term care is 3.8 years, so I start with a 4-year (48 month) basis; people who have Alzheimer’s in their families might consider getting a longer benefit period.
Monthly Benefit:
Long-term care is a supplement to whatever income you have, taking in mind income and potential future costs, but some is better than none! A suggestion is to run a maximum $5,000 monthly benefit for all the illustrations. If you need closer to $2,000 a month or some other number, that variable could be plugged in to bring down the premium.
Home Care Waiver:
The waiver allows you to receive their long-term care at home rather than in a nursing facility, a good consideration given our recent pandemic situation.
Inflation Protection:
There is an option to provide for inflation protection; this will increase the benefit for just a little more.
Cash Surrender Value Rider:
For example, if you go 20 years without needing the policy, you can get about half of it back (unlike car insurance!).
Did you know that long-term care companies can raise their rates on a monthly basis? YIKES! None of the carriers I work with are crazy with this; for example, Mutual of Omaha has had an average increase of 2-3% over the last eight years, so less than $2.50 in California. That’s doable. 😊
And there are different kinds of policies:
Reimbursement:
You pay for the care yourself, submit receipts, and they reimburse you. This means you’d better have some money set aside in the bank for the monthly outflow of cash for at least the first month.
Indemnity Plan:
The company pays the full amount of the policy, no need for receipts. This tends to be more expensive.
If you would like to know more about long-term care, please give me a call and we can go over it, or email me and I will send you a questionnaire and return a report of findings.
Not Long-Term Care . . . But It Helps
There is an alternative for those who don’t opt for traditional LTC plans. It’s prepaid home health care. You can get a home care plan that you choose lifetime membership hours when you purchase the plan, and the more years you don’t need to use it, the lower the monthly cost is. When you DO need it, the care can be provided by an agency or a friend or neighbor.
Here’s the services you could receive:
- Meal Planning / Preparation
- Grocery Shopping
- Assistance with Dressing
- Monitor Diet and Food Expirations
- Medication Reminders
- Grooming
- Accompany to Place of Worship
- Laundry, Ironing, and Changing Linens
- Accompany to Doctor Appointment
- And More
There is no health questionnaire and no underwriting because it’s not an insurance plan, more like a savings club. It’s worth checking out; email me know if you’d like more information.
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