If you are trying to figure out how to use your mom or dad’s long-term care insurance (LTCI), or you are ready to start using the long-term care insurance in which you’ve been investing, paying for home care can be easier, but it also can be confusing to know where to start.
If you or your parent chose a plan years ago, it can be difficult to remember what exactly the benefits were or how to go about activating them. If your parent no longer has the cognitive ability to remember the plan, it’s even harder. However, you don’t have to go about this alone.
Before making a big decision, make sure you have all the relevant information at your fingertips. We recommend speaking to a Home Care Assistance care manager to understand your situation in more detail. A care manager can call the insurance company with you during an in-home assessment to understand your loved one’s policy and expected benefits. This professional also is familiar with advising you on the process, complying with any expiration period requirements, and understanding whether your care needs are sufficient to trigger your benefit.
Our care managers are experts in the administrative setup and ongoing paperwork required to make sure you receive your benefit. This will reduce the likelihood you experience delayed or declined reimbursement and means less hassle for you. The Mesa/Gilbert office phone number is (480) 699-4899.
What is Long-Term Care Insurance, and What Does it Cover?
Long-term care policies vary from plan to plan, but overall, they offset some costs of future care. For example, long-term care insurance comes into play when you have an illness, disability or impairment that interferes with daily functioning. Most policies require that you meet two of these criteria:
- The inability to perform two or three specific activities of daily living. These include bathing, dressing, eating, toileting and transferring from the bed or a chair.
- Cognitive impairment. Most policies cover stroke, dementia and Parkinson’s disease. Policies may exclude other types of mental incapacity.
- Medical necessity, or certification by a doctor that long-term care is necessary.
How Much are the Benefits Worth?
Traditional LTCI policies are one to five years. Short-term LTCI policies (less common) are around 90 days. Depending on the policy, you can be reimbursed for nonmedical in-home care, adult day care, the monthly fees of assisted living or the daily rate for a nursing home.
Benefits usually are expressed in daily caps for years of duration. For example, a typical benefit is a $200 daily cap for four years. The benefit almost always kicks in after an expiration period of paying out-of-pocket (30 to 90 days, usually 90 days).
The policies are worth the daily cap for the duration of the benefit. Typical daily caps are $100 to $300, and typical durations are one to four years, depending on the coverage selected. Daily caps can vary depending on whether they are used for home care, assisted living or nursing care.
Doesn’t Medicare Pay for These Expenses?
Medicare does not pay for home care, assisted living or nursing home care. Medicare will only pay for short-term stays in rehab or medical home health. Long-term care insurance will not pay for services already provided by Medicare.
However, you may be receiving benefits through Medicare, such as short-term home health care from a nurse. In that situation, long-term care insurance still will pay for home health care services if you meet the criteria.
What Are the Different Types of Long-Term Care Insurance?
There are many types of long-term care policies. Most traditional policies are similar but will have great variability in coverage. Questions to ask your insurance broker (and find the supporting print in the legal document):
- Waiting period. Is the waiting period of 60 to 90 days cumulative over time?
- What are the lengths of time or dollar amount limits?
- Do the benefits increase with the cost of inflation?
- Does the policy cover a portion of nursing home care, or does it cover care in the home and assisted living?
- Do premium rates increase every year?
- Are premiums waived during the time you are receiving benefits?
What If I Don’t Ever Need the Care Benefit?
You don’t get your money back if you don’t use long-term care benefits, with most policies.
However, a newer whole life/LTCI is a hybrid policy you can draw upon for long-term care.
These policies return money to heirs even if you end up not needing long-term care. They are more expensive than traditional policies.
Amanda Butas, our Mesa client care manager, is happy to discuss how your policy might be used for home care. Call (480) 699-4899, or visit our office at 2031 N. Power Road, Suite 103, next to Bed Bath and Beyond.