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2/27/2013Home Care News

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Senior Specialists Group Glendale/Burbank Monthly Chapter Meeting

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Senior Specialties - Online: Long Term Care

   Moderated by Richard WeathermanAdvantage Plus Caregivers

Important facts to take into consideration.

Over 70% of all people over 65 will need custodial care at home, in an adult day care center, or in a residential facility or nursing home. What will it cost? Now it costs $80,000 to $120,000 a year or more, possibly for many, many years. What will it cost in the future? Who will pay for it?

Regarding Long Term Care Insurance consider these sobering facts. Medicare, Medicare supplements, & HMO’s won’t cover long term "custodial” care at all! Only "skilled” care is covered for a very limited period of time. To qualify for Medicaid(cal), you must first "spend down” most of your lifetime savings. Also, a new federal law levies "criminal penalties” for certain asset transfers designed to create or hasten medical eligibility for Medicaid(cal).

Will your spouse, children or other loved ones be able to help out with years of protracted day-to-day "care giving?” Even if they can, is it fair to them? Protect your lifetime savings before it’s too late! Most of us don’t want to consider that we may one day need long-term care, but good "financial planning” dictates that we should. Long Term Care Insurance can help you reduce the financial burden and maintain your freedom to select the provider of the facility of your choice. Wouldn’t it be nice to have the insurance company pay for the home care service? Long term Care Insurance could be the answer!

"The Health Insurance Portability and Accountability Act of 1996” gives tax advantages for the purchase of Long Term Care Insurance. Premiums will be "deductible” as a medical expense and benefits will be paid "tax free” to the recipient. Most people are healthy enough to qualify today and you can find out without any obligations.

Types of Long-Term Care Insurance Policies: Indemnity vs Reimbursement LTC Insurance

Understand the difference in Indemnity Vs Reimbursement plans. Traditional “reimbursement” long term care insurance policies pay benefits based upon the actual expenses you incur. The other type of long term care insurance policy is an “indemnity” plan which pays a monthly cash benefit, regardless of the expense incurred. Costs on the indemnity policy is usually less for the same amount of coverage.

With a traditional reimbursement long term care plan you may have to submit care provider bills, be limited to the type of service you can be reimbursed for and the amount you can receive each day. What happens if you have a have a high home health care cost on a particular day that exceeds your policy’s Daily Maximum? What if you have a niece who wants to be your caregiver or you need significant modifications to your home to allow you to stay there as long as possible?

The Problem – Reimbursement Only Policies

Most long term care insurance policies are designed as reimbursement only.  With a reimbursement only policy, upon submitting all of your receipts for long term care expenses the insurance company will reimburse you up to your policy’s limits.  Unfortunately, you may have ancillary expenses associated with your long term care, including expenses to:

  1. add ramps and expand doorways throughout your home
  2. add additional railings to your staircases or add wheelchair lifts
  3. purchase or lease a van with a lift to get to and from your physician’s office

You may also want complete control over how you want to spend your long term care benefit, regardless of your actual expenses.  That flexibility is not permitted with a reimbursement only policy.

Most long-term care insurance policies are based on a concept that gives an individual access to a "pool of money” in exchange for the payment of monthly premiums over the years. Insurers use complex actuarial formulas to "predict” how many people will need to use the money and how much interest they will earn on the premiums. Policies generally have four key areas that the individual should consider and compare when purchasing a Long Term Care insurance product.

1. The benefit period: The length of time after a claim is filed that the insurer will pay for the care provided (from one year up to lifetime coverage);

2. A daily benefit: The maximum dollar or percentage amount the insurer will pay for care each day (from about $30 to $300 per day);

3. The elimination period or deductible: The length of time and the amount of money that must be paid out-of-pocket before the insurer starts to pay (from "first day coverage” to a one-year wait);

4. The level of inflation protection: The amount your benefits will increase over time to keep up with inflation (for example, $240 per day sounds adequate today, but may be too little in 10 or 15 years). The individual buying the policy can choose virtually any combination of benefits, deductibles, or inflation protection options. Choosing the maximum amount under any of these areas will raise the cost of your policy.  

The individual buying a policy can choose virtually any combination of benefits, deductibles, or inflation protection options. There is no "standard” long-term care insurance policy, so be sure to read the fine print!

So ask a Long Term Care Senior Specialist to find out what is right for you? 

Group Feed
Ellen Makenna joined the group Senior Specialties: Long Term Care.
Posted Monday, January 21, 2013
Richard Weatherman joined the group Senior Specialist Group: Long Term Care.
Posted Thursday, January 17, 2013

Recently Updated Profiles
Richard Weatherman, Phil Leddel

 

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