Have you heard of Long Term Care (LTC) Insurance and wondered what it was? Unlike traditional health insurance, long-term care covers long-term services and supports. Coverage includes personal and custodial care in various settings, such as your home, a community organization, or other facilities. Health insurance covers doctor’s appointments, hospital treatment, home health, and skilled nursing facilities (SNFs). Additionally, depending upon your health plan, it covers medications, durable medical equipment, and rehabilitation treatment (i.e., physical therapy).  

How does LTC pay, and what does it cover?

Private insurance companies provide LTC policies that reimburse policyholders per the pre-agreed daily amount up to a pre-selected limit. Limits are selected using daily amount times the number of years chosen (typically 2 to 5 years). A few old policies do not have limits, but this is rare. Most Long-Term Care policies limit how long or how much they will pay. 

Long Term Care covers the duties of a caregiver assisting with two of their Activities of Daily Living (ADLs):

• Ambulating
• Feeding
• Dressing
• Personal hygiene
• Continence
• Toileting.  

Long Term Care policies may help people needing assistance with their Instrumental Activities of Daily Living (IADLs) (cognitive disorders):

• Transporting
• Shopping
• Meal preparation
• Managing finances
• Housecleaning or home maintenance
• Managing communication with others
• Medication management

Does Medicare pay for Long Term Care?

Medicare will only pay for skilled services or rehabilitative care. A Skilled Nursing Facility (SNF) has a maximum of 100 days of coverage. Regrettably, the average Medicare-covered stay is much shorter (22 days). Therefore, it is essential to check with your SNF provider.

Generally, Medicare will cover skilled in-home services (home health aide from a home health provider) for a short time. Medicare does not pay someone to help a person with their Activities of Daily Living, which is most of the services needed. Those services must be paid out of pocket unless you have a Long-Term Care policy.

Will Medicaid pay for Long-Term Care?

Medicaid will pay for the largest share of long-term care services, but only to qualifying low-income individuals that meet minimum state eligibility requirements. They also factor in the amount of assistance needed with ADLs. 

Other long-term care services are available through the Older Americans Act or the Department of Veterans Affairs. Unfortunately, these apply to only specific populations and particular circumstances.

What are some determining factors for Long-Term Care insurance?

• Most experts recommend purchasing Long-Term Care coverage in their mid-50s while they are healthy. Most carriers deny applicants over 75 as health issues arise. Carriers look at a person’s age and health; the more health problems, the more you pay.
• Gender is another factor. Women generally live longer and are more likely to file a claim, so they pay more than men.
• Marital status is looked at since single people pay more than married couples.
• Coverage options affect the premiums. Factors include daily or lifetime benefits, a cost-of-living adjustment for inflation, shorter elimination periods (waiting periods), and fewer coverage restrictions affect premiums.

Talk to a long-term care specialist, life insurance broker, or financial advisor to learn more. STAGES is here to educate people about the options out there.