Long Term Care Insurance in the United States

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Contents:

  • How to fix U.S. long-term care over the long haul
  • More choices and personal service from United Insurance.
  • Navigation menu
  • Basics of health care insurance coverage

    • As for where to shop, seek out an independent agent who sells policies from multiple companies rather than a single insurer. For extra expertise and a wider choice of policies, Olson says to look for agents able to sell what are known as long-term care partnership policies — part of a national program that has continuing education requirements for insurance professionals.

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    Most states have a State Partnership Program. Be sure to ask your insurance agent whether the policy you're considering qualifies under the State Partnership Program, how it works with Medicaid, and when and how you would qualify for Medicaid. These plans let you buy a single policy that covers more than one person. The policy can be used by a husband and wife, two partners, or two related adults. However, there is usually a total or maximum benefit that applies to everyone insured under the policy.

    With such a joint policy you run the risk of one person depleting funds that the other partner might need. Insurers often turn down applicants due to preexisting conditions. If a company does sell a policy to someone with preexisting conditions, it often withholds payment for care related to those conditions for a specified period of time after the policy is sold. Make sure this period of withheld payments is reasonable for you. If you fail to notify a company of a previous condition, the company may not pay for care related to that condition.

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    Most companies will provide an informal review to determine whether you are eligible for the policy. This is helpful if you're likely to be denied coverage since another company may ask whether you've ever been turned down for coverage. Some insurance companies require you to use services from a certified home care agency or a licensed professional, while others allow you to hire independent or non-licensed providers or family members.

    Make sure you buy a policy that covers the types of facilities, programs and services you'll want and that are available where you live. Moving to another area might make a difference in your coverage and the types of services available. Find out whether the policy covers more than room-and-board.

    How to fix U.S. long-term care over the long haul

    A residence with apartment-style units that makes personal care and other individualized services such as meal delivery available when needed. Adult day care services: A program outside the home that provides health, social and other support services in a supervised setting for adults who need some degree of help during the day. An agency or individual who performs services, such as bathing, grooming and help with chores and housework. Adaptations, such as installing ramps or grab bars to make your home safer and more accessible.

    Services provided by a trained or licensed professional who assists with determining needs, locating services and arranging for care. The policy may also cover the monitoring of care providers.

    If a new type of long-term care service is developed after you purchase the insurance, some policies have the flexibility to cover the new services. The "future service" option may be available if the policy contains specific language about alternative options. Most policies have some type of limit to the amount of benefits you can receive, such as a specific number of years or a total-dollar amount. When purchasing a policy you select the benefit amount and duration to fit your budget and anticipated needs.

    With this coverage option you can combine services that meet your particular needs. As the price of care increases over time, your benefit will start to erode unless you select inflation protection in your policy.

    Most companies look to your inability to perform certain "activities of daily living" ADLs to figure out when you can start to receive benefits. Generally, benefits begin when you need help with two or three ADLs. Requiring assistance with bathing, eating, dressing, using the toilet, walking and remaining continent are the most common ADLs used.

    You should be sure your policy includes bathing in the list of benefit triggers because this is often the first task that becomes impossible to do alone. This is because a person with Alzheimer's may be physically able to perform activities but is no longer capable of doing them without help. Mental-function tests are commonly substituted as benefit triggers for cognitive impairments. Ask whether you must require someone to perform the activity for you, rather than just stand by and supervise you, in order to trigger benefits. All policies have some conditions for which they exclude coverage.

    Ask the agent to review these exclusions with you. Most states have outlawed companies from requiring you to have been in a hospital or nursing facility for a specific number of days before qualifying for benefits.

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    However, some states permit this exclusion, which could keep you from ever qualifying for a benefit. Coverage exclusions for drug and alcohol abuse, mental disorders and self-inflicted injuries are common. Most policies include a waiting or elimination period before the insurance company begins to pay.

    This period is expressed in the number of days after you are certified as "eligible for benefits," once you can no longer perform the required number of ADLs. You can typically choose from zero up to days. Carefully calculate how many days you can afford to pay on your own before coverage kicks in. The shorter the period, the higher the price of the policy.

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    Choose a policy that requires you to satisfy your elimination period only once during the life of the policy rather than a policy that makes you wait after each new illness or need for care. Many policies allow you to stop paying your premium after you've started receiving benefits. Some companies waive premiums immediately while others waive them after a certain number of days. Since many people purchase long-term care insurance 10, 20 or 30 years before receiving benefits, inflation protection is an important option to consider. Indexing to inflation allows the daily benefit you choose to keep up with the rising cost of care.

    Basics of health care insurance coverage

    Typically, the simple option won't keep pace with the price of services. The benefits paid out through a long-term care policy are generally not taxed as income. Buying a long-term care insurance policy can be expensive, but there are steps you can take to make it more affordable and flexible. If all you want is cost-effective coverage — even if that means nothing back if you never need help — traditional LTC insurance has the edge. While more than insurers sold policies in the s, now fewer than 15 do.

    You can increase your benefit by a given percent 5 percent is often recommended with either compound or simple inflation protection. If you're under age 70 when you buy long-term care insurance, it's probably better to have automatic "compound" inflation protection. This means that the amount of your daily benefit increase will be based on the higher amount of coverage at each anniversary date of the policy.

    Typically, the simple option won't keep pace with the price of services. In lieu of automatic increases, some policies offer "future-purchase options" or "guaranteed-purchase options. If you turn down the option several times, you may lose the ability to increase the benefit in the future. Without increasing your coverage this option may leave you with a policy that covers only a fraction of your cost of care.

    The younger you are when you buy long-term care insurance, the more important it is to buy a policy with inflation protection. Companies can't single you out for a rate increase. However, they can increase rates on a class of similar policies in your state. Most premiums do increase over the life of the policy.

    The National Association of State Insurance Commissioners has established rate-setting standards and about half of the states, along with several of the large insurance companies, have adopted these measures. Long-term care policies are "guaranteed renewable," which means that they cannot be canceled or terminated because of the policyholder's age, physical condition or mental health. This guarantee ensures that your policy won't expire unless you've used up your benefits or haven't made your premium payments.

    If you stop paying your premium or drop your benefit, a "nonforfeiture option" will allow you to receive a reduced amount of benefit based on the amount of money you've already paid. Some states require policies to offer nonforfeiture benefits, including benefit options with different premiums. If your policy doesn't have a nonforfeiture option and you stop paying the premiums, you'll lose all the benefits for which you have paid.

    If you've determined which long-term care insurance options best meet your needs and you're ready to buy a policy, do the following:. Deciding whether long-term care insurance is right for you can take a significant amount of time and research, but making the effort will be time well spent. Save on eye exams, prescription drugs, hearing aids and more. Exclusive program for members from OptumRx.