Archive for May, 2010

LTC Misconceptions

Misconception #1: It won’t happen to me.

LTC By The Numbers

  • One in Two – Americans will need Long-Term Care at some point in their life. Long-Term Care Your Financial Planning Guide 2003
  •  65 year olds – can expect to need an average of 3 years of formal and informal long-term care, and 20% can expect to need more than 5 years. Kemper, Penn State University, Inquiry 2006
  •  21% Of Americans who are either caring for an aging parent now or have had to do so in the past. CBS News Poll (Feb. 07)
  • 50% Proportion of population 85 and older that will require help with activities of daily living. Wall Street Journal Online (Feb. 07)

Misconception #2: I can afford It…

Current Care Costs

  • Nursing Homes – Nationally the average annual cost for a private room in a nursing home is $70,912 ($62,532 semi-private). Average length of stay – 2.6 yrs. Care Scout 2005
  • Home Care – $18-$20 per hour – $52,000 annually @ 8 hrs per day, the average duration for receiving home care is 4.3 years. National Alliance for Caregiving and AARP 2004
  • Assisted Living Facilities – average $34,860 + per year. Average length of stay is approximately 3 years. MetLife Mature Market Survey 2005-

Misconception #3: Medicare Covers LTC

The devils in the details.

The Facts On Medicare… Medicare only covers skilled care – care defined as; services provided by or under the supervision of technical or professional personnel, and:

  • Must be rehabilitative care with ascertainable goals.
  •  Maximum nursing home benefit is 100 days.
  • Maximum nursing home benefit is 100 days.
  • Maximum nursing home benefit is 100 days.
    Misconception #4: Medicaid will pay…
  •  It will pay – after you’ve exhausted most of your assets.
  •  Medicaid limits your choices – usually to a Nursing Home.
  •  I’ll give my money away and get Medicaid – Medicaid has a 60 month look back period on transferred assets. If caught there is a penalty period.
  • You typically must use the facility that Medicaid directs you to use.
  • You may want to stay at home or go to an Assisted Living Facility.
  • Medicaid pays less to facilities than it costs to provide care.
  • Estate Recovery – requires Medicaid to recoup assets from your estate at death.
    Other Popular LTC Misconceptions…

Prenuptial agreements protect my assets from long-term care costs my spouse may incur. – False. Medicaid does not recognize pre nuptial agreements. When you are married the assets of both are considered for “spend down” purposes.

Living Trusts protect my assets from long-term care costs. – False. Irrevocable trusts can protect assets from LTC costs, but are subject to the 60 month look back period. Living Trusts are not designed for long-term care asset protection from Medicaid.


What is Long Term Care

Many people think “Long Term Care” means a nursing home. In fact, Long Term Care includes a wide continuum of care situations. Some people receive Long Term Care in an Assisted Living Facility, others attend an Adult Day Care Facility, and for many, Long Term Care can also be received in your own home.

The level of care depends on several factors. These include the type of impairment, the severity of impairment, and in some cases, the ability to pay for care.

Long Term Care services may be necessary at any age. The following are three of the most common reasons for Long Term Care:

•Short Term Medical Treatment – Long Term care may be needed when an individual is recovering from surgery or other temporary conditions. For many, Long Term Care helps leaving the hospital and going home.
•Accidents and Injuries – Acute conditions such as broken hips, strokes, disabling accidents and heart attacks often require a longer period of Long Term Care.
•Chronic Illness – Ongoing conditions such as dementia, emphysema or even functional decline (due to the aging process) will result in an extended need for Long Term Care services.
Long Term care services are generally custodial and personal in nature. Because neither Medicare nor medical insurance pay for any custodial care, this should be a major concern to you.


How will I Pay for Long Term Care Services?

You can pay for these services a number of different ways:

•Pay out of your own pocket and deplete a lifetime of savings
•Apply for Medicaid, but you will be required to spend down your assets and “become a ward of the state”
•Purchase a Long Term Care Insurance Policy


How can Long Term Care Insurance Help?

Long Term Care Insurance will provide benefits to help you pay for the Long Term Care services as you need them. A Long Term Care policy is an important part of your financial portfolio. It can help to:

•Protect your assets so you have the money to do all the things you planned to do in retirement
•Preserve your estate to pass unto your heirs.
Long Term Care can also give you “piece of mind” knowing you can:

•Remain in your own home
•Maintain Control
•Receive the quality care you need
•Retain your dignity
•Avoid burdening your family with the responsibility of caring for you


What is the Cost of Long Term Care ?

Long Term Care services can be expensive, and costs vary widely based on where you will be receiving care.

National rates are as follows*:

•The average daily rate for a private room in a nursing home is $203, or $74,095 a year
•The average daily rate for a semi-private room in a nursing home is $176, or $64,240 a year
•The average monthly rate for assisted living facility is $3,061, or $36,372 per year
•The average hourly rate for a home health aid is $19, or a 10 hour day for $190
These costs are expected to DOUBLE in 20 years!!

“An American at age 65 has an average life expectancy of 18.7 more years.”

How will I Pay for Long Term Care Services?

You can pay for these services a number of different ways:

•Pay out of your own pocket and deplete a lifetime of savings
•Apply for Medicaid, but you will be required to spend down your assets and “become a ward of the state”
•Purchase a Long Term Care Insurance Policy


The Claim

You own a LTCI policy and have been paying the premiums for years. Sometimes when it is time to pay the premium, you have thought, “Why am I spending this money?” In these tight economic times it becomes easy to think I will just let this policy lapse. Why not drop the policy? It’s only a piece of paper sitting in my file cabinet. What does it do or what has it done for me; absolutely nothing.

But then…

You go to your annual doctor’s appointment for your physical, take some tests, and your doctor says, “I will call you with the results.” However, instead of hearing, “Everything looks fine, see you next year,” the message says, “Please call the office to set up another appointment, we need to discuss your test results.”

Or…

All of a sudden, you wake up with some discomfort in your left arm, a little pressure in your chest, and then next think you know…911.

Or…

Your out with friends; Dinner and a movie, or a concert just having a fun evening. You didn’t see the curb or the crack in the sidewalk and then you fall. You feel the hip it and then the pain.

These are just some of the situations that can and do confront all of us.

Now you are in the hospital or the ER hoping for the best. Family and friends are all concerned about your well being. You may be admitted to the hospital and then perhaps rehab. You have survived this horrible incident. You have all the nurses there, the physical therapists, and all the help you need. But what you are most concerned about stays on your mind. “What will I do when I go home? I am going to need this help there.”

Then you remember…

“I have a Home Health Care (Long-Term Care) Policy…This is Great News!” However, you realize that you cannot remember your benefits. You also realize you have o idea on what to do to start utilization of that policy:

  • “Where do I get help?”
  • “How long can I have help each day?”
  • “Who pays for the help? The Insurance Company or me?”

You have no idea whom to call; Your spouse or kids don’t know either. And of course, the agent that sold you the policy years ago has never maintained contact and you have no idea where he/she is.

You possibly hire someone referred to you, but how do you know if:

  • They are acceptable to the insurance company?
  • They are bonded?
  • They had a physical in the past year (to prevent spreading of disease)?
  • There has been a background check recently (to make sure they are of good character)?

By the time you get to the insurance company to actually file your claim, you get confronted with questions, claim procedures, and of course endless amounts of paperwork all regarding utilization of your policy. Your confused and angry that after paying your premium all of those years, the ability to receive the promises made long ago seem so impossible to receive.

Unfortunately, the process of accessing your policy benefits overwhelms most individuals. You’re sick, not at your best and if you do not have a responsible “advocate” by your side, many just give up.

Do you know your:

  • Daily Benefit?
  • Elimination Period?
  • Benefits Period
  • What ADL’s are?
  • How many ADL’s to activate your policy?
  • If you have inflation?

These are just some of the hurdles when it is time to use your Home Health Care/Long Term Care Policy. If you can not answer one of these questions, you must call me! You now have that “advocate.” Even if you did not buy your policy from me, I can help you understand your policy and answer these questions for you.

I take pride in the fact that service is my #1 priority. Since the very beginning of my career in the insurance industry, I have always maintained that my clients believed in me and the products I represent. I have a professional and moral obligation to be my clients advocate. When any of my clients (regardless where they reside) need to use their policies, they know they must call me. Not only do I know their policy benefits, but I am an expert in the claims procedure. I am also able to assist my clients in obtaining the appropriate help. I not only offer my clients piece of mind that they are appropriately insured, but I have and always will deliver all promises made.

Abe Glickman, LTCA, LTCP

Member: AALTCI, NAHU, NAIFA, SOA

Abe Glickman Insurance Group

Toll-Free Phone: 877-298-5824

Email: AG@AbeGlickman.com

“It is better to create a plan 10 years too soon than one day too late.”

Questions or Comments? Give me a call!