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Long Term Care Insurance: What are Your Options?

Jesse Smedley

Jesse Smedley

Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.

Long Term Care Insurance: What are Your Options?

Around 70% of adults 65 and over will need some type of long term care. What are your options?

Medicare

Medicare does NOT cover long term care. The confusion lies with Medicare Part A which covers skilled nursing facilities. Long term care (for something like Alzheimer’s) may disqualify you. Additionally, skilled nursing facilities are not designed to help with things like eating, dressing and bathing. You must need true medical care; like changing a medical dressing from an operation.

Medicaid

Medicaid may be able to help pay for long-term care. However, there are strict financial criteria that you must meet. Medicaid looks not only at your income but also at your assets. You need to significantly spend down your income (by paying for medical costs) in order to be eligible. Most people will have to purchase an actual long-term care insurance policy.

Costs

On average, long-term care (without insurance) can cost between $50,000 and $100,000 per year. But premiums can be rather expensive. A single, healthy 55-year-old man will pay approximately $1700 per year. They vary based on your age, health, gender, and marital status. You’ll be asked to fill out a questionnaire or undergo a medical evaluation. The older you get, the more likely you will be charged more. You may even be denied outright.

You may have to meet an elimination period during which you’ll be responsible for the costs. After that, there may be limits to your coverage. Your plan may have a time limit, perhaps up to three years. There may be a financial limit, possibly $300,000. You can also enroll in a plan with no limits but those tend to have much higher monthly premiums.

Certain long-term care plans offer benefits for married couples such as being able to draw from your spouse’s benefits once you’ve exhausted your own. Additionally, if you itemize your deductions come tax time, you may be able to deduct your monthly premiums.

Criteria

Long term care plans look at basic activities to determine whether you qualify. The activities are divided into two categories:
  1. Activities of Daily Life (ADLs)
  2. Instrumental Activities of Daily Life (IADLs)

Activities of Daily Life

There are six basic ADLs that will usually be assessed:

  1. Bathing
  2. Dressing
  3. Eating
  4. Transferring
  5. Toileting
  6. Incontinence

Instrumental Activities of Daily Life

In addition to ADLs, long-term care plans may assess IADLs. These are more complicated tasks such as:

  1. Using a telephone
  2. Managing medicine
  3. Housekeeping
  4. Meal prep
  5. Managing finances
  6. Pet care
  7. Accessing transportation
  8. Personal shopping

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