Health Insurance

Many people are unwilling to purchase long-term care insurance (LTCI) until much later in life, in their 80s rather than in their 50s, say but a host of recent articles have been turning up in everything from senior care trade publications to small local dailies, which will cover on the subject of the LTCI industry trying to welcome the burgeoning senior baby boomer market. LTCI is one area that most do not want to entertain and yet aging and long-term care always will be an issue.

So What Is To Be Done? There are some who speculate that it is actually in the insurance company’s favor to have these premium payments rolling in. But to them we would like to point out that even with that being salient, LTCI; although possibly in wolf’s clothing, is still a sheep, due to the fact that the consumer will pay less if insurance is purchased when they are still in their younger age and (hopefully) healthy.

So When Should You Start Looking into Your LTCI Options? Over time, a LTCI recipient actually pays less; not just incrementally, however, it is based as a whole because the premium is not only based on the age at which you buy. it is typically locked in from the beginning. In order for you to better understand, here is an upcoming article by Gilbert Guide;s CEO, Jill Gilbert, in Active over 50 magazine: If a healthy 55-year-old woman purchases an LTCI policy at about $1,500 a year, by the time she is 85, she she will have spent $45,000 for thirty years of coverage. which is a marked increase.

So, this means that waiting to buy an identical policy at 75 increases the annual cost to about $7,500; this means that the oldest policyholder in this comparison ends up paying $75,000 for only ten years of coverage;a whopping 400% increase from the 55-year-old woman! Find out how long-term care insurance can help you? Get a free long-term care consultation and quote.

Many of us will gladly take Mom to her doctor’s appointments, administer medications, and check in if the need arises without a second thought. But with millions of loyal children caring for aging parents out of their own pockets, a little financial relief is welcome. Few family caregivers are aware that you can get paid;however small the amount may be, to care for Mom and provide homecare services.

Because of the long working hours, a lot of adult children are forced to leave their full-time jobs or even scale back their hours spent on the clock, leading to a significantly reduced cash flow. Fortunately, if being a caregiver is causing a noticeable financial strain, there are homecare reimbursement programs that can help alleviate some of the burden. Keep in mind, however, that you must practice patience when applying for these programs, make sure that your application is up-to-date and all the necessary attachments are included before you send it so that delays aren’t any longer than necessary.

Long-Term Care Insurance (LTCI) Reimbursement

Long-term care insurance, which functions as an indemnity program, only pays the insured the amount that was contracted at the outset, and regardless of homecare services that are received,will only pay that specified amount. LTCI, which covers nursing home, home health care, adult day care services, assisted living facilities, and hospice care, offers payments to in-home family caregivers, though the insurance must include in-home care and/or homecare services coverage. In certain instances, LTCI requires that family caregivers complete a basic training program on homecare services and/or caregiving for elderly patients.

Even though almost all LTCI contracts include skilled intermediate and custodial long-term homecare services, you shouldn’t rely on this type of insurance to be your only fallback when it comes to paying for in-home health care. Though, for clarification, you should contact your LTCI company directly for details on its family caregiver reimbursement policies as well as what is needed to qualify. Medicaid Cash and Counseling Program A state-administered program, Medicaid is only available to low-income individuals and families who meet certain federal and state law eligibility requirements. In other words, if you have limited income and resources, applying for Medicaid relief is advisable; however, you must be able to meet specific eligibility criteria. Persons over the age of 65 with limited income and resources immediately become eligible as well as those who are terminally ill or live in a nursing home.

Fortunately, if the person you’re caring for is either eligible for or is currently enrolled in the Medicaid program, you may be able to receive direct payments from its Cash and Counseling program, though it is available only to family caregivers in select states, including but not necessarily limited to Alabama, Arkansas, Florida, Illinois, Iowa, Kentucky, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington, and West Virginia. In some cases, the person you’re caring for may have too high an income, excluding him or her from the Medicaid program; some states, such as Georgia, Maine, Nebraska, North Dakota, Oklahoma, and Oregon, have accounted for this oversight and offer similar programs (the National Family Caregiver Support Program is one).1 Medicaid, aware that family caregivers are often the best care providers for Mom or Dad, will now send a check directly to the recipient to reimburse for homecare services made, though this amount depends upon various assessments of overall needs and the average cost of in-home health care for that particular state. This money can also be used by family caregivers to purchase supplies, medical equipment, or even to pay for ADLs (activities of daily living).

For you to find out if your loved one is eligible or for more information on the Cash and Counseling program, please call the National Program Office at 617-552-2809. Making the Arrangement with Mom Official Since money is involved, it’s recommended that family caregivers draw up some sort of short, typed contract that outlines the terms of the caregiving situation in depth, including the frequency and pay rate, homecare services and job description that will be provided, and how various expenses will be reimbursed (if applicable). Hiring an attorney or other legal professional will help all family caregivers involved create a legal document that prevents sticky situations from arising.

It’s also important to remember that this payment is viewed as income by the government, so all family caregivers must report their earnings each year as taxable income. Though the money received for providing homecare services is negligible, it will help to offset many of the costs associated with providing Mom (or Dad) with a loving, stable, and comfortable home.

For those who are not familiar with the term, underwriting means the acceptance of risk in return for payment. In long term care, this happens once an applicant becomes a policyholder, paying the insurance company to accept the risk that may require them to pay out claims on the applicant’s behalf. Many people wonder what the application process and the underwriting process for long-term care insurance are about and how it all works. I’ll discuss all of that in this article. Why is it that underwriting is necessary? The answer to this question has to do with how insurance functions.

Think of insurance as a pool of money into which different parties have made deposits. These funds can then be used to pay for the financial losses of individual depositors who have had to make a claim due to unforeseen circumstances. In the case of long-term continuous care, the funds could be used to pay for custodial care for the individual policyholders who may have developed a need for this type of care.

One primary objective of underwriting is to spread the risk among the pool of policyholders as equitably as possible in a manner that is also profitable for the insurance company. The premiums in which each of the policyholder needs to pay are directly affected by how much money the insurance holder expects to have to pay out for claims. This can only mean that the insurance company has to manage the risk that it will have to give money out of that central pool of funds. The more money they have to pay out, the higher the cost of the insurance for everyone. Risk management, once again for those who are not familiar, involves analyzing the potential risks for each of the applicant (and the associated costs of those risks) in order to set premium rates for policyholders and mitigate the potential financial losses for the insurer.

How are long-term care insurance premiums calculated? To manage the payout risk, each insurance carrier employs underwriting procedures to make sure that applicants with high-risk medical histories are not allowed into the insurance pool, which would thereby drive up the cost for everyone else. Obviously, while the risk involved is taken by the insurer directly informs the premium rates that policyholders must pay, there are different levels of risk which are reflected the different premium rates. This is actually how a long term care insurance company determines the premium rate that you will pay, which I will discuss further in a future article. What underwriting procedures are employed? One of the first thing of underwriting that all carriers use is the application form where the applicant lists his or her relevant personal health history and authorizes the insurance company to examine their medical records.

More often, the carrier will schedule a phone health interview that lasts for about fifteen to twenty minutes. One of the main purposes of this telephone call is to assure the carrier that the applicant should not have any cognitive problems that would become evident in the way the phone conversation is conducted. After this, the carrier will then request a copy of the medical records from the applicant’s primary care physician to verify that person;s overall health. If the applicant has been treated by a specialist for any serious illness in recent years, a copy of those medical records may be requested as well. This is where the whole process can sometimes bog down for a few weeks if the doctor’s office does not process the record request quickly. However, once the carrier receives the medical records, a final underwriting decision usually follows very quickly.

A vital ingredient in any successful long term care insurance plan is to have a cheap policy without having to give up on good coverage. If you receive quotes from several highly rated insurers and yet found out that these premiums are still too much to handle, there is no need to panic and assume that long term care insurance costs too much. You can just adjust the benefit amounts of the original quotes to bring the premiums more in line with your expectations, thus ensuring an affordable policy.

Know the Costs of Long-term Care Where You Live

One of the many ways to lower premium costs is to make sure that you know what the actual costs of care are in your area. There are lots of statistics used when discussing long-term care costs and these are always based on national averages. The actual cost of home care, nursing homes and assisted living facilities in your particular area may be much lower. You can find out about local long-term care costs by either downloading the latest Genworth Cost of Care Guide or by calling a few local home care agencies and long-term care facilities to ask for comparison rates.

Adjust Your Benefit Period

Another way to lower long-term care insurance premiums is to use a shorter benefit period. Many consumers feel that non-limited benefits are necessary for good coverage. A recent study published by the American Association for Long-Term Care Insurance in their 2009 Sourcebook revealed that only eight percent of those who buy a three-year benefit period exhaust the policy and still need care. Only a little over one percent of those with a five-year benefit period will see their claims closed due to policy exhaustion. This can only mean that lowering the benefit period can be a practical way to lower insurance costs without sacrificing vital coverage.

Reexamine the Elimination Period

One way to bring down long-term care insurance premiums is to increase the elimination period (the number of days after your care begins that precedes the insurance company’s first payment of claims).

Take note that almost 90% of individual continuous care insurance policies uses a period of elimination between ninety and one hundred days based on the same 2009 Sourcebook referenced above. If you have initial quotes used a thirty-day or sixty-day elimination period, you may have the ability to significantly lower the premiums by choosing a ninety-day elimination period instead. There are other ways that an experienced long-term care specialist can help make this kind of insurance more affordable for you. If you ask for suggestions on bringing down your premiums, the specialist will be happy to work with you to craft a long-term care insurance policy that is effective and affordable.

One variation on Managed Care plans that acts as a Medicaid alternative is the nationwide PACE program. The San Francisco-based On Look program that provides the housing, long term care and programming for the area’s senior population led to the development of the larger PACE program. The program aims to keep seniors who normally would require placement in a skilled nursing health care facilities a choice to stay in the wider community by providing a breadth of interdisciplinary services. By utilizing adult day care programs, PACE integrates medical and social services.

Those who managed to enroll in PACE programs have their care overseen by a multidisciplinary team, which can include doctors, nurses, social workers, nutritionists, occupational and speech therapists, as well as health and transportation workers. For you to be able to enroll in a PACE program sometimes requires the payment of a monthly premium. For a listing of PACE programs nationwide, click here.

What It Covers: Take note that PACE enrollees recieve all health care services through PACE, including doctors’ services, hospitalization, therapies, pharmaceuticals and equipment along with:

Adult day health care.

Medical care, which is provided by a PACE doctor along with specialists

Home health care and personal care

Prescription drugs

Social services

Respite care

Hospital and nursing home care when necessary

Hospice care

Eligibility and Qualifications

Coverage is available to persons who are:

55 or older.

Certified by their state to need nursing home care

Able to live safely in the community at the time of enrollment

Living in a PACE service area

Note: People who are interested in getting into the PACE program are also eligible for both Medicaid and Medicare. However, PACE enrollment’s primary qualification is one’s health status rather than age or income level.

Trends In Reimbursement

In some countries, Medicaid recipients are often required to enroll in Managed Care programs. The reasoning behind this trend is to keep the cost of services low to the provider by contracting and centralizing all medical needs. It also means consumers are not given a choice. This change is occurring on a county level for now, but as it gains popularity may become more prevalent.