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What is Long-Term Care Insurance?
Long-Term Care (LTC) Insurance can be a safeguard against the escalating costs of skilled nursing care. LTC insurance allows individuals to protect their assets for themselves and their families, instead of using them to pay for a costly nursing home stay or care at home.
Who buys LTC policies?
Most LTC insurance policies are purchased by people typically in their 50s through 70s.
What’s covered?
There are no "standard" benefits in LTC insurance. Benefits covered by LTC insurance will vary from company to company, and from policy to policy, even within the same company. Essentially, LTC policies cover care rendered in licensed nursing homes, as well as home health services provided by state licensed and/or Medicare-certified home health agencies.
The level of care that LTC insurance will cover varies greatly. An important variance to be aware of is that some LTC policies cover all three levels of care (skilled, intermediate and custodial) while others may only cover skilled care. Also, some policies may require prior hospitalization before accessing services, while others do not.
Some other areas in which, LTC coverage will vary include:
- Assisted Living
- Adult Day Care
- Alzheimer’s disease
Another area in which LTC insurance coverage will vary is in the benefit period. Benefit periods commonly last for two years while some more expensive plans cover a longer benefit period. Still others have benefit periods that are less than 2 years.
Waiting Periods and Maximum Benefit Amounts
Two important aspects of LTC insurance are the waiting periods and maximum benefit amounts. When individuals buy policies they designate the number of days they will receive care prior to the LTC insurance covering it. Individuals will also designate their daily maximum benefit.
For example, let’s say that an individual designated a waiting period of 14 days and a maximum benefit of $100 per day. Individual A will have to wait 14 days until LTC insurance will pay for care and on the 15th day will cover expenses up to $100. Anything over $100 will be the responsibility of the individual. Consequently, insurance premiums will be higher for those policies with lower waiting periods and higher benefit amounts.
What’s NOT covered?
Typically, LTC insurance policies do not cover alcoholism and drug abuse, nor do they cover illnesses caused by an act of war or by an intentionally self-inflicted injury.
Levels of Care Defined
- Skilled care is care that must be rendered by a nurse or therapist, on a daily basis, under the supervision of a physician.
- Intermediate care is care that must occasionally be rendered by a nurse or therapist.
- Custodial care is care that does not require the assistance of a nurse or therapist, but that of an aide. Typically custodial care involves assistance with activities of daily living.
Bottom Line
Understand exactly what is and is not covered by a policy especially before you buy it.
***Extended Home Care will research covered benefits of those who are appropriate for private duty home care and who choose EHC.
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