This is a short primer on long term insurance. To begin, what is it? Basically it’s an insurance policy which covers the often ridiculous prices associated with end of life care. A good policy will cover costs associated with home health care, adult day care, assisted living facilities, and long-term care facilities.
Sure, there is a chance your patients will never need this sort of care. Or that this can’t happen to you. Well, we all know we’re living longer than we were a few generations back. In fact your chances of developing some form of dementia almost double for each five year period after the age of 65 (N. I. H, 2011).
I recently attended a community lecture given by local State Farm agent Cary Bohn. He cited an interesting statistic from the 2009 Field Guide from the National Underwriter Company that said the chances of needing long-term care by the age of 65+ is 1 in 2; while the chances that your house will be lost in a fire is 1 in 96! His rationale was that while the average middle aged American wouldn’t dream of forgoing insuring their home, why go without long-term care insurance? After seeing those statistics I was more inclined to feel the same.
What about Medicaid? Well that’s a tricky subject as qualifying for benefits depends on the state you live in and your personal financial situation. Many people falsely think that Medicaid will cover them if and when they need long term care. Strict income/asset limits must be met by the applicant, meaning that you’ll have to be near insolvent to qualify. There are law practices devoted to essentially bankrupting people so they can qualify!
Other considerations to think about when deciding on, or recommending the possibility of long term care insurance are:
- How comfortably you think you would want to be while you were receiving daily care?
- Realizing that that many facilities do not accept Medicare as payment.
- Or, you or a loved one won’t have a private room at a Medicaid facility either.
On the flip side, there are some serious downsides to purchasing a long term care policy.
For example, you could end up overpaying. For this reason it’s wise to seek at least two different quotes from insurers and weigh the options. Premiums could rise. While it’s true that your premiums will likely be lower if you purchase a policy while you’re in the age bracket of 40-50, insurer’s often raise rates the closer you get to the 70-80 age bracket. Another useful thing to consider is the longevity of the company you’re purchasing from. Check out the financial health of your insurer at www.thestreet.com.
Finally, there is always the possibility of your company giving you a fight when it’s time to use your benefits. Read all paperwork with a careful eye before signing anything and make sure you’re clear on what and how much your policy covers (Kristof, 2009).
Guest blogger is Andrea Stephens, Texas AHEC East – North Central Region
References
- National Institute on Aging, N. I. A., National Institutes of Health, N. I. H., U.S Department of Health and Human Services, H. H. S., & World Health Organization, W. H. O. National Institute on Aging & National Institues of Health, (2011). Global health and aging (11-7737). Retrieved from National Institutes of Health website: http://www.nia.nih.gov/sites/default/files/global
- Kristof, K. (2009, 06 17). Long-term care insurance: 4 biggest risks to avoid. CBS: Money watch. Retrieved from http://www.cbsnews.com/8301-505146_162-51312771/long-term-care-insurance-4-biggest-risks-to-avoid/
Join us for a real-time discussion about questions raised by this essay on Wednesday from 12:15 p.m. to 12:45 p.m. See Discussion and SL tabs above for details. Link to the virtual meeting room: http://tinyurl.com/cjfx9ag.
Rodger Marion 
February 24, 2013 at 10:05 am
Interesting points, Andrea. I’ve never considered the fact it’s more likely we will need LTC insurance than insurance on our relatively catastrophe-free homes. It’s an awakening thought to realize a lifetime of savings might not cover the expensive care we will need some day.
February 28, 2013 at 9:43 am
Transcript from Discussion on Aging (Feb 27, 2013)
[10:11] Coffee Mug whispers: Ahh! Fresh Hot Coffee
[10:15] Saphira Avindar is online.
[10:16] Rodger Markova: Hello Zemuley. Welcome. I’m Rodger Marion, the moderator
[10:16] Rodger Markova: Hello Saphira
[10:16] Zemuley Andrew: @~@ ? ? ?l ? ? ? @~@
[10:16] Zemuley Andrew: ?/
[10:16] Zemuley Andrew: /¦
[10:16] Zemuley Andrew: / \
[10:17] Rodger Markova: Saphria, this is Zemuley. A visitor to the Discussion
[10:17] Drdtrain is online.
[10:17] Saphira Avindar: Hello Zemuley. My real life name is Rebecca.
[10:18] Rodger Markova: And Dr Train over there is Tony
[10:19] Saphira Avindar: Hi there Tony! It’s Rebecca
[10:20] Rodger Markova: Zemuley, the blog that we are discussing is shown on the secrren above the fireplace.
[10:20] Rodger Markova: blog*
[10:20] Saphira Avindar: I read it this morning
[10:21] Saphira Avindar: It will be interesting to see what changes occur with long term care options with health reform
[10:22] Rodger Markova: Hi Regina
[10:25] Rodger Markova: Did you see this notice in the community calendar, Zemuley?
[10:25] Drdtrain: Wow. 5 people. Nice.
[10:25] Zemuley Andrew: Yes. Can i just listen in?
[10:25] Rodger Markova: Yes of course
[10:26] Zemuley Andrew: I’m not from the university ? I bet u can tell.
[10:26] Saphira Avindar: We have all types of people here
[10:26] Drdtrain: So who wants to get the discussion going?
[10:26] Rodger Markova: You know my dad bought long term insurance when he was around 65 and had to cancel it due to the expense at about 75 and got really sick at 80 and lived another 12 years after that.
[10:27] Saphira Avindar: What “options” does long term care insurance cover aside from a traditional nursing home?
[10:27] Rodger Markova: I’ve had long term insurance for at least 10 years and so far it’s still reasonable
[10:28] ReginaJKnox: Rising premiums…
[10:28] Rodger Markova: Mine provides for in-home care and will even pay relatives as caretakers
[10:28] ReginaJKnox: What about those companies that say if you sign with them your insurance premium will not increase?
[10:29] Rodger Markova: There is still a cost of living adjustment that pays for raising the reimbursement rates of the policy. The premium cost then does drift upwards over time.
[10:29] Drdtrain: If LTC insurance is designed to cover not just LTC but things not covered by Medicare or Medicaid, how is that different from Medigap insurance?
[10:30] Rodger Markova: So mine has advanced at 5% every other year
[10:30] Drdtrain: Maybe most Medigaps don’t cover LTC needs.
[10:30] Rodger Markova: It’s for people who are not on Medicaid and Medicare does not cover LTC
[10:30] ReginaJKnox: I don’t remember about LTC insurance in my employee orientation.
[10:31] Rodger Markova: Nor does regular “gap” insurance
[10:31] Drdtrain: I think Medicare covers a limited number of LTC days, such as for SNF rehab. But not ‘long term’.
[10:31] Rodger Markova: UTMB offers it. I got mine outside UTMB as it was not offered then
[10:31] Saphira Avindar: What happens if the insurance company goes bankrupt. LTC insurance is not included in basic employee coverage; it is an additional option
[10:32] ReginaJKnox: When should a person start thinking about get LTC insurance. Is it like estate planning.
[10:32] Drdtrain: LTC insurance covers several others things like Alz. unit care, some policies cover assisted living, home care, maybe even adult daycare. Depends.
[10:33] ReginaJKnox: Is it like whole life insurance? Does it have a $value?
[10:33] Rodger Markova: It’s cheaper the earlier you begin, but in your 50’s might be a good choice but you must be able to qualify so no chronic health issues that tend to guarantee you’ll need LCT. Like Dianne did not qualify due to having a diagnosis of COPD. The trick may be to wait as long as possible but to stay healthy
[10:34] Drdtrain: I think you can obtain LTC insurance at any age – although most don’t obtain it until later in life. Eligibility for benefits depends on need and function, such as ADL assistance.
[10:35] ReginaJKnox: Can I purchase LTC insurance for my mother?
[10:35] Rodger Markova: I would imagine so or at least you can pay for it
[10:36] Drdtrain: Don’t see why not.
[10:35] Saphira Avindar: For the relative caregiver option, are there any training requirements?
[10:36] Rodger Markova: I don’t think so as to training for caregivers but I’m not really up on the details
[10:37] Saphira Avindar: I think that staying at home with a caregiver is ideal, but I have also encountered elder abuse cases related to financial incentives.
[10:37] ReginaJKnox: I am interested in LTC training for caregivers.
[10:38] Rodger Markova: Yes, abuse is a problem
[10:38] Rodger Markova: There have been cases of people hiding dead relatives and continuing to collect
[10:39] ReginaJKnox: That’s awful!
[10:39] Rodger Markova: Human behavior is at time quite astonishing
[10:39] Drdtrain: Maybe we can look into a workshop for the ADEP targeting caregivers and insurance information & needs, options etc… Get a probate judge to talk about things to be aware of for LTC, spendown, etc…
[10:40] Saphira Avindar: Does anyone know the estimated cost of LTC per month or year? I like the workshop idea from Tony.
[10:41] Drdtrain: $$ depends on policy options. If you go on-line and Google something like LTC insurance with State Farm, they give you a quote based on specific needs, location (State), age etc…
[10:40] ReginaJKnox: I like the workshop idea also Tony
[10:41] ReginaJKnox: To get Medicare you have to make less than 60K? What amount income and asset limits?
[10:44] Drdtrain: 65 to begin Medicare – but if you are disabled you can apply for Medicare before age 65.
[10:46] Rodger Markova: Oops, time has run out. Zemuley, we stop at 12:45.
[10:46] Rodger Markova: Thank you all for coming today
[10:47] Zemuley Andrew: ?*:-.,_,.-:* Okay *:-.,_,.-:* ?
[10:47] Zemuley Andrew: I enjoyed listening and will be back next week
[10:47] ReginaJKnox: Thank you.
[10:47] Drdtrain: OK. Got a HRSA conference call at 1pm – what joy! Enjoyed it all. Bye
[10:47] Saphira Avindar: Thanks for the chat. I learned some interesting things.
[10:47] Rodger Markova: Super. Bye everyone