Information for Seniors

Long-term care (LTC) insurance includes a wide range of services provided to people who need ongoing help with routine daily activities in their own home or in a nursing facility.

With the recent advances in medicine, we all know that people are living longer and more are requiring expensive assistance in their later years of life. Long Term Care health services can be provided in your home, in an assisted living facility or in a nursing home. In many cases the family is no longer able to provide around the clock care, since many family members may not live nearby; they may have other pressing family commitments, or simply cannot get the take leave from work.

According to the Health Insurance Association of America, 48.6% of people age 65 and older may spend some time in a nursing home and 71.8% of people age 65 and older may use some form of home health care. Additionally, less and less of nursing home costs are paid by Medicare Part A. The average annual nursing home cost has exceeded $40,000 and often much more.

Nursing home costs are likely to increase dramatically over the next thirty years and are estimated to reach $190,000 annually (according to the U.S. Department of Labor, Advisory Council on Employee Welfare and Pension Benefit Plans Report, Findings, and Recommendations of the Working Group on Long-Term Care, November 14, 2000). When you stop to consider that nearly half of people who reach age 65 may need institutional care for three years or more; you can see how easily costs could run into hundreds of thousands of dollars.

The greatest difficulty with Long Term Care is the lack of preparation for the costs incurred when someone you love requires assistance. Some people can pay the bill out of pocket, others will qualify for Medicaid (welfare), but most of us will fall somewhere in the middle. You have worked hard all of your live and now we can lose everything to a nursing home.

Items to consider when examining Long Term Care Insurance Policies:

Does the policy cover:

• Skilled, intermediate and long term care
• Nursing care in a licensed, skilled or intermediate facility
• Assisted living care
• Home health care
• Adult day care
• Hospice care
• Specific coverage for Alzheimer's disease
• Payment for the actual cost of care (versus a set dollar limit)

Does the policy require:

• Prior hospitalization before benefits are payable
• A waiting period if you have a pre-existing condition
• Payment of a deductible before benefits are in force

Does the policy clearly state:

• What documentation is necessary to qualify for benefits
• The length of confinement necessary before waiver of premiums
• Conditions of reinstatement after cancellation or lapse of payment
• Lifetime structure of payment schedule and adjustments for inflation
• The requirements for upgrading the policy in years to come.

A long-term care insurance policy can help protect your assets from the rising cost of care, allowing you to remain financially and socially independent. Long Term Care can help secure not only your financial future, but also that of your family.

Medicare is a Health Insurance Program for:

• People age 65 or older.
• Some people with disabilities under age 65.
• People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).

Medicare has Two Parts:

Part A (Hospital Insurance) Most people do not have to pay for Part A.

Part B (Medical Insurance) Most people pay monthly for Part B.

• Part A (Hospital Insurance)

Helps Pay For:

Care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, and some home health care.

Cost:

Most people get Part A automatically when they turn age 65. They do not have to pay a monthly payment called a premium for Part A because they or a spouse paid Medicare taxes while they were working. If you (or your spouse) did not pay Medicare taxes while you worked and you are age 65 or older, you still may be able to buy Part A.

• Part B (Medical Insurance)

Helps Pay For:

Doctors, services, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.

Cost:

You pay the Medicare Part B premium of $54.00 per month. In some cases this amount may be higher if you did not choose Part B when you first became eligible at age 65. The cost of Part B may go up 10% for each 12-month period that you could have had Part B but did not sign up for it, except in special cases.

Every company offering Medigap insurance must offer Plan A. In addition, companies may have some, all, or none of the other plans.

Basic Benefits - Included in all plans:

• Hospitalization:

Pays the Part A coinsurance plus coverage for 365 additional days during your lifetime after Medicare benefits end

• Medical Expenses:

Pays the Part B coinsurance (generally 20% of Medicare-approved expenses)

• Blood:

First 3 pints of blood each year

Plans F and J also have a high deductible option. If you choose this option, you must pay $1,530
out-of-pocket per year before the plans pay anything. Insurance plans with a high deductible generally cost less than those with lower deductibles.
**Covers 50% of the cost of prescriptions up to a maximum annual benefit of $1,250 after the policyholder meets a $250 per year deductible.
***Covers 50% of the cost of prescriptions up to a maximum annual benefit of $3,000 after the policy holder meets a $250 per year deductible