Long Term Care

What is Long Term Care?

Long term care involves a wide variety of services for people with a prolonged physical illness, disability or cognitive disorder (such as Alzheimer's disease). Long term care is not one service, but many different services aimed at helping people with chronic conditions compensate for limitations in their ability to function independently. Long term care differs from traditional medical care as it is designed to assist a person to maintain his or her level of functioning, as opposed to care or service that are designed to rehabilitate or correct certain medical problems. Long-term care services may include, but are not limited to, help with daily activities at home, such as bathing and dressing, respite care, home health care, adult day care, and care in a nursing home.

Persons with cognitive impairments generally need supervision, protection or verbal reminders to accomplish everyday activities. Persons with physical illnesses or disabilities often need hands on assistance with activities of daily living. The activities of daily living, shown below, are considered personal care (also known as custodial care) and are generally not covered by Medicare, Medicare supplement insurance, or major medical insurance provided by most employers.

  • Bathing- Bathing oneself or getting in and out of a tub or shower
     
  • Continence- Maintaining bowel and bladder control
     
  • Dressing- Putting on or taking off clothing, appendages or necessary braces and fasteners
     
  • Eating- Feeding oneself
     
  • Toileting- Getting to and from the toilet and performing personal hygiene
     
  • Transferring- Getting in or out of a bed, chair or wheelchair to move from place to place by walking, wheelchair or other means

Long Term Care Insurance

Long-term Care Insurance can help you shift a significant portion of the financial burden to a third party should you need long-term care. Current studies show that over half of women and nearly one-third of men age 65 years or older will need some type of assistance or will enter a nursing home.

How does it work?

 A long-term care insurance policy provides a daily or monthly dollar amount to help you pay for covered long-term care services. Here at Senior Care Plus We can help you assess your needs and select an amount that’s appropriate for your unique situation.

When the need for long-term care arises, a licensed health care practitioner must submit a plan of care that certifies you are chronically ill or you need continual supervision due to a severe cognitive impairment.

Chronically ill: This means that you need help with at least two or more of your activities of daily living (bathing, eating, dressing, toileting, transferring and continence.) 

Cognitive impairment: examples Dementia and Alzheimer’s

Once Benefits are triggered and your elimination period satisfied. Your benefits will be paid as a cash benefit or a traditional reimbursement. The choice is yours and you have the ability to switch between the two.

The benefits will continue to be paid up to both the maximum monthly benefit amount you select and policy limit is reached if any.

Terms:

Elimination period: Deductible set number of days before benefits begin

Cash Benefit: A cash payment made directly to you in lieu of all other benefits 

Reimbursement:  After satisfying your elimination period the policy will reimburses your long term care expenses up to the maximum monthly amount you selected.

Policy limit: Initial maximum dollar amount over the life of the policy.

What does it cover?

  • At home care
     
  • Assisted living facility care
     
  • Nursing home care

Sample Cost of Care: Jackson Mississippi

Nursing Home

Daily

Monthly

Annual

Private Room

$197

$5,920

$71,046

Semi-Private Room

$189

$5,684

$68,211

Assisted Living Facility

     

One-Bedroom Unit

$82

$2,458

$29,500

Home Health Care

     

Home Health Aide

$125

$2,506

$30,080

Home health care costs are based on services received eight hours per day, 20 days per month. Costs are rounded to the nearest whole dollar amount.

Source: Mutual of Omaha’s Cost of Care Survey conducted by Univita, 2012.


Who Provides Long Term Care at Home?

Traditionally, long term care has been provided by a family member.  However, most of these caregivers are now part of the workforce, and as a result face conflicting demands on their time and financial resources.

What About Major Medical or Disability Income?

Major Medical

Traditional medical insurance normally excludes custodial care, long term confinement in a nursing home, and home care. Most employees are unaware of this risk.

Disability Income

Disability income is intended to replace a portion of the employee’s paycheck. Most often, this amount will scarcely meet existing financial obligations, leaving nothing to address the added costs of long term care.  

What About Medicare and Medicaid?

Medicare

Medicare and Medicare Supplement Insurance usually will not pay for long term care.

Medicaid

To be eligible for Medicaid, individuals must spend down their own resources until they become eligible for welfare programs.

Who Pays for Long Term Care?

Unfortunately, most long term care expenses are paid for out of people’s pockets, out of the savings they are accumulating or have accumulated to enjoy their retirement.

Why Are People Purchasing Individual Long Term Care Policies?

  • To protect their assets
  • To protect their spouse's standard of living
  • To maintain their freedom of choice
  • To avoid being a burden on family and friends

…So this insurance is so much more than financial.  It is giving families the money and lifestyle to keep their dignity. And you can’t put a price on dignity.”*
 *The Wall Street Journal, Helping Hands, Glenn Ruffenach, quoting Phyllis Shelton, October 22, 2001.

The financial costs of long term care present what may be employees’ greatest financial risk, particularly during retirement years.

Traditional medical insurance normally excludes such care, which is important for working age employees.  For retirement planning, it should be noted that Medicare is not structured to pay for most long term care costs.

Long term care insurance is surprisingly affordable when made available through sponsored groups.

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