Planning Ahead For Long-Term Care

By Jan Howard

Forty-three percent of people over age 65 will spend time in a nursing home for an average of 2.7 years. Seven in ten couples over age 65 will use home health care.

Maria Corrado, RN, a long-term care specialist of Senior Insurance Services, conducted a seminar on “Long-term Care Insurance” on October 3 at Lockwood Lodge, Ashlar of Newtown’s assisted care facility.

“Long-term care is needed when the simple things you do become difficult,” Ms Corrado said. “When you need help, that’s what long-term care is all about.”

Long-term care can be used at any age, not just during old age, she noted.

“Most people want to stay at home,” Ms Corrado said. They may need help, however, with activities of daily living, such as bathing, dressing, eating, and other needs. They may have cognitive impairment, such as memory loss, orientation, and reason.

“A nurse can make sure the home is safe, and capable of handling a wheelchair,” she said. “A nurse can make sure you have adequate help.”

Some long-term care plans allow the use of people outside of an agency, such as a family member or friend. “Most care is custodial care, the basic needs of daily living,” she noted.

For intermediate care, some skilled care is required at a nursing home facility, but the patient goes back home. For skilled care, when it is too difficult to stay at home because of the need for intensive care, constant supervision, and treatment by a skilled health care professional, a small percentage of people go to a nursing home.

Home care is care received in the home, often provided by family and friends or through nurses, therapists, home health aides, personal care attendants, and homemakers and chore aides. It can cost up to $4,000 a month or $50,000 a year. This cost will double in 15 years, Ms Corrado said. “Assisted living is in this ballpark.”

Assisted care facilities have a community, apartment-like setting, with 24-hour personal and custodial care. These often welcome the spouse as live-in.

Community care supports a person’s ability to stay at home. Adult day care provides drop-in care during the day. Respite care provides temporary overnight care as relief for caregivers. This can cost about $53 a day.

A nursing home provides 24-hour custodial care and nursing services in a more institutional or hospital-like setting. It offers skilled nursing and therapies. Nursing home costs in Fairfield County amount to $250 a day or $8,000 a month, the highest cost in the United States. This cost is expected to double in 15 years to $200,000 a year.

“It’s incredible,” Ms Corrado said. “Who can you depend on to care for you every day? Years ago, it was family.” Today, she added, options, include family, government (Medicare/Medicaid), spending down assets, and transferring risk through long-term care insurance.

Family members may not be the answer today because families are smaller and live farther away, more women are in the workforce, and family members may not have the experience to take care of physical and emotional demands. Also, there is the question of personal dignity, she said.

“Do you even want your children to do that?” she asked.

Medicare offers a short-term solution, providing all costs for the first 20 days in a skilled nursing home facility care if three full days are first spent in the hospital. For 21-100 days, Medicare will pay 100 percent of the costs over $97. After 100 days, there is no coverage for nursing home care.

While Medicare will pay some costs of home care for intermittent care of an hour or two daily, such as nursing or physical therapy, it must be ordered by a physician.

“It is very frustrating to cut people off from care when they still need help with bathing and dressing, but Medicare doesn’t cover custodial care,” Ms Corrado said.

To apply and qualify for Medicaid (Title 19), assets must be spent down to $1,600. “Medicaid is welfare. It was created for the poor. It is primarily for institutional care,” Ms Corrado said.

It takes three months to qualify for Medicaid.

“You have to be almost out of money,” she said. “You have to meet income and asset criteria. If you are in a nursing home, Medicaid doesn’t pay for private rooms.”

She said one-half of women could need such care.

Transferring The Risk

Long-term care insurance can offer a person choices of quality care, helps to protect assets, minimizes emotional impact on the family, and helps ensure choice, dignity, and security, Ms Corrado said.

“It can ensure your life savings,” she said. “Do you have other dreams for your money?”

Ms Corrado said families are insuring for life’s other risks, such as health, home, auto, life, disability, and business insurance. Most people don’t think they will ever need long-term care.

Long-term care insurance may not be for everyone, she said. Some things to consider include whether there are assets to protect, whether there are plans for those assets, whether care might be needed some day, and how that care would be paid for.

Ms Corrado explained about a Connecticut Partnership plan for long-term care that is only available in three other states. “This is not for everyone as well,” she said.

If a person continues to need care after a partnership policy has paid benefits, the person may apply for assistance from Medicaid, she noted. When determining eligibility, the Department of Social Services will disregard or ignore assets the person has up to the amount the partnership policy has paid in benefits.

What to Look For In A

Long-Term Care Policy

Ms Corrado said when considering long-term care insurance policies, look at their daily benefit amount, elimination period, and benefit period.

“Look at how much it pays, for how long, and where will it pay,” she said. Some additional things to consider would be inflation protection, preferred discounts, and care coordination, such as visiting nurse.

“Consider an inflation rider,” she said. “Look at how much coverage is necessary and affordable.”

Those considering long-term care insurance may want to inquire about additional policy options, such as bed reservation benefits, respite-care benefits, survivorship benefits, equipment purchase/rental benefits, waiver of premium benefits, restoration of benefits, and alternate plan of care benefits.

The plan should allow the flexibility to hire people other than through home health agencies.

The plan should give provide 100 percent of the daily maximum for home care, not 50 or 75 percent. Home care is most often where people receive care.

Look at the elimination period (deductible or waiting period) and for how much is out of pocket. Ask if this deductible is waived for home care. Find out if the company stops collection on premiums if care is received at home, or only if in a nursing home.

Ask if you are eligible for claims because of needing substantial assistance with two out of six activities of daily living. Does the policy define what “substantial assistance” means?

Are there special discounts for spouse or partner (20 percent) and preferred health (10 percent)? Does the company rescind the discount if one of you is declined coverage?

Ask if there is a survivorship benefit. If no claims were paid during the first ten years of holding the policy, and one spouse dies, the surviving spouse or partner does not have to pay any more premiums.

What To Look For In An

Insurance Company

Ms Corrado offered the following advice in choosing a long-term care insurance company.

Choose a stable company. Look for at least 15 to 20 years in the long-term care insurance business, with no history of premium increases for existing policyholders and an A+ rating, which indicates financial strength and the company’s ability to pay future claims.

It should have a history of timely manner of paying claims, history of rate stability, and at least 50,000 customers. It should also have coverage in all states.

Check which professional associations recommend the company and why. Endorsements are made only after the company’s policies are thoroughly compared, and found to be superior to those of other companies.

 “Long-term care insurance is not inexpensive, but more financial planners are recommending it,” Ms Corrado said. “Most people believe they won’t need long-term care but two out of five will need nursing home care sometime. Very few people plan for it.

“We are on the brink of a long-term care crisis,” she said. “It is very affordable in late 50s or early 60s. The younger you buy it, the cheaper the premium.

“The premium gets higher by age,” Ms Corrado said. “You also risk uninsurability.”

“It’s a gamble,” she said. “If you don’t have insurance, what would you sell off first. It’s an emotional decision. You have to ask yourself, if it happens to me, whose money do I want to use for it?”