Long-Term Care Insurance

Home care includes a multitude of medical and personal services provided in your own home. Home care can make it possible for an individual to receive care in a comfortable, familiar environment and retain a measure of independence. Home assistance is available through some hospitals, home care agencies, and public health departments. It includes services provided by nurses, therapists, and home-care aides, including:

• Health care — nursing, social work, physical and rehabilitative therapy, and medication monitoring
• Personal care — assistance with personal hygiene, medical equipment, dressing, bathing, and exercise
• Nutrition — meal planning, cooking, and meal delivery
• Housekeeping — laundry, shopping, and household paperwork
• Social and safety needs — transportation services, companionship, and daily telephone checks

Arranging a home care program requires some investigating and organizing; you may have to coordinate services from more than one source. The local Area Agency on Aging — 1-800-677-1116 — can provide information about most aspects of home care, including how to find competent caregivers. You may also want to ask for referrals from friends and relatives, physicians, and hospital discharge planners.

Adult Day Care Centers are an adjunct to home care. They offer social and health services in a group setting to individuals who are frail, physically challenged, or cognitively impaired. These centers provide care in a safe, protective setting during daytime hours. Services may include medical care, rehabilitation therapies, nutrition therapy, and health monitoring. Adult day care is often a cost-effective care option. The centers offer a respite to family and other caregivers, helping them avoid burnout and, perhaps, helping loved ones avoid premature admission to a residential care facility. for sources to help locate adult day care centers in your community.

Those who need care beyond what they can receive at home, but not requiring the level of care provided by a nursing home, may find the help they need in assisted living facilities. Many of these residential facilities provide a home-like atmosphere, and some are structured so individuals have their own apartments. Staff is available to assist 24 hours a day. Depending on specific needs, residents can receive assistance with housekeeping, meals, and personal care, including help with daily activities such as eating, bathing, and dressing. There are no federal regulations for assisted living facilities, and the licensing requirements vary from state to state. Assisted living facilities may be referred to in some states by other names, such as personal care home, residential care facility, and adult group living facility.

Nursing homes, also referred to as nursing facilities, are residential facilities that provide around-the-clock care and supervision. Nursing homes offer a range of services from skilled care for seriously ill people who require close supervision by a licensed nurse to custodial care, often provided by nursing assistants supervised by a nurse.

All states have licensing requirements for nursing homes and perform surveys to evaluate the quality of care. Most states maintain databases you can access to get general information about a facility (e.g., number of beds); resident details (e.g., percent of residents who are physically restrained;) and staffing details (e.g., staff hours/resident ratio). You can also see the results of state evaluations and often summaries of complaints lodged by residents and families. This information can provide a starting point for selecting a nursing home.

Before selecting a nursing home or assisted living facility, you should investigate several facilities. You can use your state's database to locate potentially appropriate facilities and also get recommendations from friends. You can tell a lot about a facility by walking around and observing the residents and staff. Some things to look for:

• Do residents seem happy?
• Do residents look clean, well-groomed, well-fed, and free from bruising?
• Do residents use the recreation areas or stay mostly in their rooms?
• Does the staff appear friendly and accommodating to residents and visitors?
• Is the building reasonably attractive, comfortable, and wellmaintained?
• Is the facility clean and free of odors-including the bedrooms, bathrooms, dining rooms, recreation and therapy rooms, and other common areas?
• Do staff members appear competent and content in their jobs?
• Are residents' calls for assistance answered promptly?

In addition to what you see, you'll need answers to many important questions to determine if a facility will meet your needs and expectations. There are excellent resources available to help you identify the information you need to evaluate a residential facility; some provide a checklist. Once such resource is the National Citizens Coalition for Nursing Home Reform website.  for links to helpful websites.

Following are examples of the types of questions you'll need to ask.

• What are the facility's policies concerning family visits? Are visiting hours designated, or can you visit whenever you like?
• Do residents have food choices at mealtimes? Can you sample a meal?
• Is the latest facility state inspection report available for review?
• Is the facility licensed?
• What is the staff/resident ratio?
• Is a social worker available to help residents adjust to a new lifestyle?

Continuing care retirement communities offer a variety of housing and health care options ranging from independent living to 24-hour skilled nursing care. These communities exist specifically to accommodate the changing health care-and associated housing-needs of older people. Individuals often join continuing care retirement communities before they are in need of any assistance. In this way, as their needs change over time, they have the advantage of being in a familiar community where they have established relationships.

There are many different fee arrangements in continuing care retirement communities. Some communities require a resident to purchase a housing unit (which can be sold at a later time) and pay a monthly fee (e.g., for health care, maintenance). Other plans have a flat monthly fee that covers “rent” and health care, which may or may not change if the level of care changes.

Long-term care can be expensive. Even a temporary stay in a nursing home can potentially derail years of careful financial planning. Although costs may vary significantly depending upon where you live, the average national cost for care in a nursing home is over $77,380 a year for a private room and almost $69,715 for a semi-private room.³

³MetLife Mature Market Institute, "The MetLife Market Survey of Nursing Home & Assisted Living Costs, " October 2008.

Medicare: What It Can and Can’t Provide

Medicare is the federal government’s health insurance program for the disabled and for people over 65. Many Americans believe Medicare (Part A & B) will pay their long-term care bills. In fact, Medicare pays for long-term care only under certain conditions and only for a limited number of days. Currently, Medicare will cover skilled care in a skilled nursing facility for (up to) the first 20 days, and a portion of the cost for (up to) the next 80 days if admission follows (at least) a three-day hospital stay and the individual needs skilled care. The “need” for skilled care is determined according to specific Medicare criteria. To receive home care benefits from Medicare an individual must also meet specific Medicare guidelines, including the need for skilled care. Medicare will also cover hospice care in a facility or at home.

The biggest gaps in Medicare coverage are:

• No coverage for “custodial” care, either at home or in a nursing facility. (Care is considered custodial when an individual’s condition is stable, care needs have not changed over a period of time, and care needs are not expected to change. Custodial care is care considered routine enough that any competent adult might be taught to perform it.)

• No coverage for care received in a skilled nursing facility unless it immediately follows hospitalization (of at least three days, within 30 days, for a condition related to the hospitalization).

• No coverage for skilled nursing facility care after 100 days.

• Coverage only through a facility or home health care agency approved by Medicare.

Medigap Plans

Medigap is supplemental Medicare insurance sold by a private company. These policies are designed to cover the “gaps” in the original Medicare Plan (Part A & B) by paying for some of the items that Medicare does not cover (such as copayment and deductibles for medical and hospital expenses). Medigap plans do not provide long-term care coverage. However, they do cover the co-insurance costs of care in a skilled nursing home for days 21-100 and may cover short-term "at-home" assistance with activities for daily living while the insured is recovering from an illness, injury or surgery.

Medicare Advantage Plans

Medicare Advantage Plans are available to beneficiaries entitled to Part A and enrolled in Part B. They are required to provide the current Medicare benefit package (excluding hospice services), and they can provide additional services which sometimes exceed the coverage Medigap plans offer. They are sold by private companies and provide several options (e.g., HMOs, PPOs). These plans do not provide coverage for long-term care, although they may provide some coverage for skilled care in a skilled nursing facility (with similar requirements as Medicare Part A) at Medicare-participating facilities.

Medicaid

Medicaid is a joint federal/state program that pays for health care, including long-term care, for people with limited income and assets. To receive Medicaid benefits you must meet federal and state eligibility guidelines for income and assets. This means that you may need to “spend down” or use up most of your assets before becoming eligible. Some assets, such as your home, may not be counted when determining Medicaid eligibility. Medicaid covers 6 of every 10 nursing home residents and finances more than 40% of nursing home and total long-term care spending in the nation. To be eligible for Medicaid reimbursement, care must be provided in a Medicaid-approved nursing facility or by a Medicaid-approved home health care agency. To obtain information about the Medicaid program, contact your local Medicaid office or Department of Social Services.

Long-term care insurance is private insurance. It is available to individuals and may also be available through a group policy with an employer, union, or association. Once enrolled, you pay a premium to an insurer in return for insurance coverage which provides some protection against the potentially high costs of long-term care. Specific benefits of long-term care insurance policies vary based on cost and insurer. In most instances, longterm care insurance plans are medically underwritten, which means that certain conditions may prevent you from being able to obtain coverage.

Premiums for long-term care insurance can vary widely, depending upon your age and the level of benefits you select. In general, the older you are when you buy a long-term care policy, the higher the premiums will likely be since the rate for coverage is based on your age when the policy is first purchased. Also, policies with higher maximum daily benefits or those with an inflation adjustment feature will tend to be more expensive.

What Does Long-Term Care Insurance Cover?

Most long-term care insurance policies pay benefits in either of the following circumstances:

• You are cognitively impaired and require supervision to protect your safety.

• You are unable to perform a specified number-typically two-of Activities of Daily Living (ADLs) without the assistance of another person.
  ADLs include bathing, dressing, transferring (e.g., moving from bed to chair), eating, toileting, and continence. In addition to nursing home care, long-term care insurance may also cover:

• Home health care, including nursing care, therapy, personal care, and homemaking from a licensed home care agency.

• Adult day-care centers.

• Assisted living.

• Hospice care at home or in a facility.

• Informal care, meaning you can select a provider of your choice to care for you at home without having to meet licensing requirements.

Before you purchase a policy, be sure you understand exactly what is and is not covered. If you need help making a decision consult a financial planner or advisor.

If you decide to purchase a long-term care policy you will need to make some choices. You'll need to select the amount of coverage you would be eligible to receive for covered services. Some companies allow you to select a total amount of coverage and a monthly benefit amount. Others require you to select a maximum daily benefit amount, with the duration of benefits usually measured in years.

What Is Not Covered?

All long-term care policies have limitations. Pre-existing conditions are sometimes excluded, so ask if there is a waiting period for such exclusions. Keep in mind that Alzheimer's disease is a leading cause of nursing home admissions, so make sure the policy does not exclude the disease. Other exclusions typically include treatment of alcoholism or drug addiction, an act of war, or a self inflicted injury, such as a suicide attempt.

Remember, a policy may not cover all expenses. If a facility charges a higher rate than the maximum daily benefit you've purchased, you will have to pay the difference. Also, most policies have a waiting period, sometimes called an “elimination period” or “deductible period” (e.g., 60 days), during which no benefits are paid.

What Should I Ask Before I Buy?

First, consider whether you need long-term care insurance. There are suitability guidelines developed by the National Association of Insurance Commissioners (NAIC) to help you determine whether a policy is right for you from a financial perspective. Before shopping for long-term care insurance, find out if your employer offers a plan. Sometimes policies are available through your employer at rates lower than you could find on your own.

There are a number of decisions you will need to make in purchasing a long-term care insurance policy. It is important that you understand how the various features of the plan work before you make your selections.Whether you are purchasing individual coverage with the assistance of an insurance agent or coverage through your employer, before you buy be sure to read thoroughly the “Outline of Coverage” that comes with the application materials.

Make sure you understand all of the conditions covered, the exclusions, and the premiums. Don't be afraid to ask questions. Compare policies from at least three companies before you make a decision, and look for a strong insurer. A strong insurer is one that receives high financial-safety marks from independent insurance-ratings companies. These ratings companies, such as Fitch; Moody's; Standard & Poor's; and A.M. Best, publish the financial ratings of insurance companies. These reports can be found on the Internet or in the reference section of most public libraries.

The following checklist will help you compare long-term care policies:

Modern medicine has made it possible for people to live extended, productive lives. Eventually, though, an illness or accident may force each of us to face the need for long-term care. If you plan now, you can be secure in the knowledge that you've anticipated and provided for those needs.

References

Long-Term Care: Your Financial Planning Guide
Phyllis Shelton, Editor
Published by LTCi Publishing
ISBN: 0-9633-5169-9

The Senior Solution: A Family Guide for Keeping Seniors Home For Life!
by Valerie VanBooven-Whitsell
Published byLTC Expert Publications, LLC
ISBN:0-9743-3733-3

Free Publications

A Shopper’s Guide to Long-Term Care Insurance
A complimentary copy may be obtained by calling the National Association of Insurance Commissioners (NAIC) at 1-816-842- 3600, emailing them at prodserv@naic.org, or writing:
National Association of Insurance Commissioners
2301 McGee Street, Suite 800
Kansas City, MO 64108-2604

“Own Your Future” Long-Term Care Planning Kit
A complimentary copy of this publication from the U.S. Department of Health and Human Services can be ordered by calling 1-866-752-6582 (TTY 1-866-752-6582). You may also download it or order it online at: www.longtermcare.gov

The quarterly Consumer Information Center Catalog lists more than 200 helpful federal government publications. Obtain a free copy by calling 1-888-8-PUEBLO or on the Internet at www.pueblo.gsa.gov/catalog.pdf.

Helpful Websites

American Association of Homes and Services for the Aging
www.aahsa.org
This site offers consumer information on home, community, and facility based services.

American Association of Retired Persons
www.aarp.org 
AARP has information on long-term care and other topics related to aging.

Family Caregiver Alliance
www.caregiver.org 
FCA offers services and support for family caregivers.

National Alliance for Caregiving
www.caregiving.org
This non-profit is a coalition of national organizations providing support to family and professional caregivers.

Eldercare Locator
www.eldercare.gov 
The Eldercare Locator is a government-sponsored resource for finding local long-term care services. You may also call 1-800- 677-1116, weekdays 9:00 a.m. to 8:00 p.m. (ET).

National Clearinghouse for Long-Term Care Information
www.longtermcare.gov
This government sponsored website has information related to all aspects of long-term care and long-term care planning.

MetLife Mature Market Institute
www.maturemarketinstitute.com 
The MetLife Mature Market Institute is the company's information and policy resource center on issues related to aging, retirement, long-term care and the 50+ marketplace. The Institute offers numerous publications and quick facts useful to retirees and those planning for retirement.

Medicare
www.medicare.gov
The official government Medicare site with a section on longterm care.

USA.gov
www.usa.gov/Topics/Seniors.shtml
This site offers inks to government resources for many issues related to aging, including caregiver support and long-term care services.

For information about other Life Advice topics, go to www.metlife.com/lifeadvice

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