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General Information
Q. What is long-term care?
A.
Long-term care (LTC) refers to a variety of services
designed to help people perform the functions of day-to-day
living to help them remain independent. Some long-term care
is aimed at providing help with day-to-day activities for
people with a chronic illness, or cognitive impairment, such
as dementia. Other long-term care services may be
rehabilitative, helping someone regain function after a
serious injury.
Disability rates are falling as a result of
preventive care and medical advances; but the longer people
live, the greater the chances are that chronic conditions
may develop, resulting in an increased need for assistance
with everyday activities.1
Q. Where can I receive long-term care services?
A.
Many people
think that long-term care refers only to services provided
in a nursing home. It’s much more than that.
Long-term care services can be provided by:
•
Nurses
•
Certified
Nursing Assistants
•
Physical,
occupational and respiratory therapists
•
Home Health
Aides and homemaker services
It
can be provided in many different settings such as:
•
Your own home
•
An assisted living facility2
•
A nursing home
•
An adult day center
•
A hospice facility or hospice services provided at home
Long-term care services may also be received in a continuing
care retirement community. This type of facility usually
provides housing, services and various levels of long-term
care services when needed, in one location. The types of
housing, a services and care services offered change with
the needs of the resident and allow the older adult resident
to “age in place.”
Life expectancy after age 65 is now 17.9 years,
an increase of 5.1 years since 1940.3
Q. What are Activities of Daily Living (ADLs)?
A.
The insurance industry has specific definitions that they
use involving certain activities and functions. These are
referred to as Activities of Daily Living (ADLs), which are
listed below.
•
Dressing
•
Bathing
•
Transferring (moving in or out of a bed or chair)
•
Toileting
•
Eating
•
Continence
aTerminology
used to indicate care facilities may vary from state to
state.
The Cost Of Long-Term Care Services
Q. What is the cost of long-term care services?
A.
The cost depends on what kind of care you need and where you
are living when you need the care. Based on the MetLife
Market Survey of Nursing Home & Home Care Costs4 and the
MetLife Market Survey of Assisted Living Costs5, the costs
for 2003 are as follows.
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Nursing Home Costs for Semiprivate Room
Semiprivate
high = $608.00 Semiprivate low = $75.00
National average daily
rate = $158.26
National average yearly
rate = $57,765
Home
Health Care
Costs for
Home Health Care Aides
Hourly high = $42.50
Hourly low = $10.00
National average hourly
rate = $18.12
Average yearly rate
(assumes five hours a day, five
days per week) = $23,556
Assisted
Living — Base Rate
Monthly —
$2,372
National average yearly
rate = $28,464
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If you require in-home
assistance from a Home Health Aide (HHA), you may start out
with an hourly visit but if you become frailer in the
future, you may also begin to need help with activities such
as bathing. This may increase the time the HHA would need to
spend with you per day and may increase the cost of service.
Also, if your needs change and you require the services of a
skilled nurse instead of a HHA, the cost of care would
generally be higher.
Because care situations vary greatly among individuals, the
costs and location of care received may also vary.
Generally, the yearly average cost of a HHA is less than
that of a yearly average cost of a nursing home, but, for
instance, if you need around the clock care, the costs may
be more expensive. Again, much depends on your care
situation.
Paying For Long-Term Care
Services
Q. How
are long-term care services paid?
A.
There are
basically four ways of paying for LTC services.
1. Self-Insure
2. Medicaid
3. Medicare
4. Long-Term Care
Insurance
1. Self-insuring
means setting aside or
having enough money to pay privately for future LTC
services, if they become necessary.
This plan may require a
dedicated, aggressive and immediate savings plan. It’s
impossible to know if or when these services will be needed,
and that makes the target savings amount difficult to
determine. For example, if a family member is involved in an
accident that leaves the family member even partially
paralyzed or if a family member develops Parkinson’s
Disease, some type of long-term care services would most
likely be necessary to help the family member function on a
daily basis.
2. Medicaid,
a joint federal-state government program for low income
individuals, will provide coverage for long-term care
expenses if your income and assets are very low or after you
have exhausted almost all of your own assets. It is an
entitlement program based on strict income and asset
guidelines. You may be required to spend your own money for
care, living expenses and other “allowable” expenses before
becoming eligible for Medicaid. This is referred to as the
“spenddown” period.
Even though every state
has different eligibility criteria for this government
program, assets and income are subject to review in order to
determine your eligibility. Many people try to transfer all
their assets immediately after it has been determined that
they require long-term care assistance; however, this time
period will not always meet the “lookback” period criteria.6
The look-back period is a
36-month period of time prior to a Medicaid application
date. This means that certain assets that have been
transferred for less than fair market value or simply
“gifted” to others in this time period are still considered
to be the care recipient’s money, funds that the care
recipient must use to pay for long-term care services. The
look-back period for assets transferred to a trust is 60
months.
When it comes to Medicaid eligibility, be sure to
research
your state’s requirements.
3. Medicare
is the federal medical
insurance program for people age 65 or older, and disabled
persons of any age receiving Social Security benefits for
not less than 24 months. It was designed to pay some of the
costs of certain health care services in order to provide
recipients access to a basic level of health care. The
majority of care provided in the U.S. today in connection
with chronic long-term illnesses or conditions is personal
or custodial care and may be rehabilitative in some cases.
Medicare will generally not pay for personal or custodial
care. However, Medicare will cover some long-term care
expenses for a short period of time per Medicare benefit
period if:
•
After a minimum
three-day stay in a hospital, not including the day of
release, you require a high level of care, as prescribed by
a doctor, such as skilled nursing care or rehabilitation
services. Medicare pays for the first 20 days of your stay
in a skilled, Medicare approved nursing facility.
•
On the days 21st through
99 of your stay, you pay a daily co-pay amount determined
yearly by the Centers for Medicare and Medicaid Services
(CMS). Medigap policies may cover the daily co-pay amount.
•
After 100 days, Medicare
will pay nothing for these services.
Medicare Supplements
(also known as “Medigap”)b
The intent of Medigap
policies is to provide coverage for Medicare copayments and
deductibles. The various types of policies, generally
classified by the letters A-J in most states, are not
primarily designed to cover long-term care expenses7 except
for those described in number three.
Admission to a nursing home is not enough to qualify for Medicare
payment. The level and type of care determines whether
short-term Medicare coverage for long-term care
will be
provided. Medicare does pay for short-term home
health care,
providing certain guidelines are met.
4. Long-Term Care
Insurance
This is
insurance designed to help pay for the cost of long-term
care services if you need them. It is not the same as
medical insurance, which generally provides coverage for
doctor visits and hospital stays.
bNot connected with or endorsed by the U.S. Government or the
Federal Medicare program.
Depending on
the type of policy and coverage selected, long-term care
insurance can provide coverage for long-term care in many
settings: your own home, nursing homes, adult day care, and
assisted living facilities.
Long term care insurance
can be issued on a group or an individual basis. If it is
issued on a group basis, the group sponsor is the
policyholder and is issued the policy. The insured will
receive a certificate as evidence of coverage. If it is
issued on an individual basis, the insured is the
policyholder and is issued the policy.
Often times, employees
enrolling in a group plan can be guaranteed coverage without
providing any medical history, on the condition that
employees enroll during the initial enrollment period and
are actively at work (not absent due to disability, leave or
illness) on their effective date of coverage. Issuers of
individual long-term care insurance policies require that
you be underwritten before they approve a long-term care
insurance policy.
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