15 Nov Long Term Care Insurance in Pennsylvania for Home Care: A Guide
In this article we discuss long term care insurance, including how it works and how it can be used to pay for expenses such as home care for seniors. Plus, we give resources for how to use your long term care insurance benefits as well as more.
Long-term care insurance is insurance coverage that will pay for assisted living, nursing home care or home care in the event you are unable to care for yourself because of a chronic condition or disability.
Only about 7 to 9 million Americans have purchased these policies, and this coverage pays for only about 12 percent of the nation’s long-term care costs. But for those who are receiving benefits, it is clearly an important asset. Below are the most frequently asked questions about long term care insurance that should give you a better understanding of the insurance and how it can be used for important services like home care.
What is long term care insurance?
Long-term care insurance is an optional product that can be purchased that is intended to fill a gap in paying for long-term care needs. The policy is purchased at an age where you are healthy and in which you can afford the premiums (and that also makes financial sense). A long-term care insurance policy helps cover the costs of care when you reach a point in life that you need assistance due to cognitive and/or physical decline or other chronic conditions and when benefits are available. This could be for home care services, or other skilled and more intensive care offered. Most policies will reimburse you for care given in a variety of places, such as:
- Your home, including home care services.
- A nursing home.
- An assisted living facility.
- An adult day care center
Who provides long term care insurance?
There are many different providers of long term care insurance. The most common insurance providers are:
- Mutual of Omaha
- New York Life
- Pacific Life
- Lincoln Financial
- State Farm
- Northwestern Mutual
- Nationwide Life
Does it matter which company I choose?
Definitely. It really depends on what you value, but each company and plans within them have varying levels of coverage and needs to fit different situations. Price is certainly one major factor to consider. Your individual circumstances and situation are very personal and unique and your coverage and premiums paid will depend on those varying factors.
Others could include a difference in services offered or included, flexibility in policies, accessibility and elimination period differences, and benefit period differences. Don’t forget to consider the level of customer service offered and the simplicity or complexity of the policy as that may be an important consideration.
What does long term care insurance cover?
Most policies sold today are comprehensive. They may cover home care, adult day care, assisted living facilities, and care in nursing homes or other specialty care settings such as Alzheimer’s or dementia care facilities. At home, care can include occupational therapy, rehabilitation, or nursing care. It also includes personal care and other non-medical home care services such as activities of daily living (bathing, dressing, grooming, etc.) in the form of home health aides, caregivers, and personal care aides.
Finally, policies can include short-term hospice care for those that are terminally ill and also respite (temporary) care to give needed breaks to family caregivers, usually for periods of 14 to 21 days.
Why should I get long term care insurance?
There are various motivations and factors for wanting to receive long term care insurance but the following three reasons sum up the main benefits of insurance:
- You will have the ability to access care rapidly: by having long term care, you will have the funds available immediately to access it. Medicaid and government waiver programs are an option, but you must meet eligibility criteria first before accessing it and application periods can be long.
- You can have a long and costly claim period: you may end up with care needs over a long period of time or with intensive needs. With each, costs will be very high and can quickly drain assets and bank accounts.
- You have freedom of choice in providers and decision-making: Unless you have substantial resources, you will inherently have fewer choices when it comes to dictating your own care. Long term care insurance can help to provide you with additional resources to give you the flexibility of choice among providers and care options.
How much does it cost?
That’s a difficult question, as costs (and coverage) can vary dramatically between plans. It also is hugely variable depending on age. As you may imagine, a long term care policy initiated at age 70 will be dramatically more expensive than a policy that commences at age 45. This 2019 national long-term care price index is a handy guide comparing prices in several different scenarios for those starting coverage at age 55 as well as the benefits received at different ages. Remember, when comparing plans, don’t forget to focus on the amount of benefits received. The cheapest plans might not have the best level of coverage or fit one’s individual needs. Additionally, one provider who has the best rates for someone starting coverage at age 55 isn’t necessarily going to be the most competitive for someone commencing coverage at age 65.
How much in care will long term care insurance cover?
Traditional long term care insurance policies include a daily benefit of $160, a three month waiting period before insurance kicks in, and a maximum of three years. Again, it must be repeated that plan details can significantly vary between plans, so study up and understand the differences. Whole life insurance policies are becoming much more popular which allow long-term care costs to be drawn from in the case of long-term care needs. These hybrid policies can even return money to your heirs if you don’t end up needing long term care.
Another benefit to these types of plans is that your rate is locked in and isn’t subject to rate hikes from long term care insurance providers. That being said, a stand alone long term care policy will be much cheaper and more cost effective than a hybrid life insurance policy. Consider for yourself if the trade offs in flexibility are worth the additional costs if you are pondering a hybrid life insurance policy to eventually pay for your home care and healthcare needs.
Doesn’t long term care insurance only cover nursing homes?
As previously mentioned, long term care covers much more than just nursing home care. This deserves special mention because common belief is that long term care insurance only covers nursing homes. To repeat, it can cover home care services that assist with activities of daily living through a home health aide or personal care aide and caregiver plus skilled care such as an occupational therapist or nursing needs. Also, it can cover many other services like adult day care and assisted living.
What is an elimination period?
You may have seen the term “elimination period” come up when reviewing long term care policies or terms. An elimination period is basically a waiting period before benefits kick in.The elimination period on a long-term care policy works like a deductible: It’s the number of days you pay for care yourself before the policy pays out.
Typically, an elimination period is 90 days. Other plans may offer different elimination period options, such as 30 or 60 days. Some may have no elimination period at all, but these are normally reserved for short-term care insurance policies. For example, a person receiving home care services for 4 hours per day would, by the definition of most insurance policies, be considered one day of elimination per shift. In theory, any relevant care episode related to long term care should be able to meet one day of elimination. Therefore, even just one hour of home care services or a 20 minute physical therapy could meet one day of elimination according to the plan. Please check your policy for details.
Can I get long term care insurance if I need it soon (or now)?
Possibly, but it’s likely that it won’t make sense. For starters, if you have urgent or near-term needs for long term care, you will likely be denied coverage outright. If you wait to start coverage at an advanced age and are approved, your premiums will often be cost prohibitive or not make financial sense in evaluating the overall pros and cons of coverage.
At what age should I get long term care insurance?
You should consider long term care insurance coverage when you are young. Just like life insurance or health insurance, premiums increase with age. That is because if you are older, your policy is considered to be higher risk (and premiums will be adjusted accordingly). For example, if you start a policy at age 45 versus age 60, you could save $440 a year on premiums for a standard policy of 3 year terms. As mentioned previously, the longer you wait, the risk also increases that you will be denied coverage altogether.
Doesn’t Medicare or Medicaid already cover long term care?
Medicare does not generally cover long-term care. It will only pay for care at home under very limited circumstances.
Medicare does pay for skilled care in a nursing home only for short periods (up to 100 days) during which you are recuperating following a hospital stay for a related condition, but that’s not the same as long-term care. Once your care needs stabilize and you need personal or custodial care, Medicare will not pay those costs. Medicare will not pay for home care services such as home health aides and caregivers for the most part.
Medicaid may cover long term care, but you must qualify for waiver services by meeting financial and clinical criteria. Read our blog about Medicaid waivers in Pennsylvania and greater Philadelphia here for more information.
What about for couples with long term care needs?
Some companies offer a flexible option for couples when both spouses buy insurance policies. Considered a shared care policy, this allows spouses to share the total amount of coverage between them. Therefore, you can draw from your spouse’s total benefits if you reach the maximum limit on your policy. For example, if you are getting home care services and then you reach your policy maximum, you can then switch to using the benefits from your spouse in these cases.
Do I pay for long term care insurance indefinitely? At what point can I stop paying premiums?
Many policies will have what’s called a premium waiver clause. Once the claim is initiated and approved, premiums are “waived.” This means that the policyholder will no longer have to pay for long term care insurance. When this happens could vary by plan. It might become effective once the first benefit has been paid out. Alternatively, it could happen after benefits have been paid for a specified number of days. Many long-term care insurance premiums will increase annually. Over time, they can become very expensive, so be sure to check if this applies under your own policy.
Where can I buy long term care insurance?
Most people buy long-term care insurance directly from an insurance agent, a financial planner, or a broker. Keep in mind that:
- Pennsylvania regulates which companies can sell long-term care insurance
- Pennsylvania regulates the products that companies can sell
- There are more than 100 companies offering long-term care insurance nationally, but 15 to 20 insurers sell most policies (some of the most common listed above)
- Find out more about long term care insurance through the Pennsylvania Insurance Department’s page here.
Using long term care insurance benefits for healthcare services and home care
When can I start to use my benefits?
With the majority of long-term care policies, you become eligible for benefits when you can’t perform two or more of the six “activities of daily living” independently. These are also referred to as ADLs. Alternatively, benefits can usually be drawn if you suffer from dementia or another cognitive impairment.
What are activities of daily living for insurance purposes?
The activities of daily living include:
- Incontinent care
- Getting dressed
- Using the bathroom (getting on or off the toilet)
- Ability to transfer (getting in or out of a bed or a chair)
Beginning the claims process
When you need home care or assistance and are ready to start a claim, the insurance company will begin by reviewing medical documents from your physician. They may send in a nurse as well to complete an evaluation. Before an insurance company will approve a claim, the insurer must review and approve the client’s care plan.
With most insurance policies, you’ll have to pay for long-term care services out of pocket for a period of time. This might be for a period of time that ranges from 30 to 100 days. As we previously discussed, this is called the “elimination period.” Meeting the elimination period is required before the insurer begins reimbursing you for any long term care services received.
Does the elimination period need to be consecutive days in a row?
This is important to consider when reviewing long term care policies and before using benefits. Some policies may require the elimination period to consist of consecutive days of care received. As an example, if your elimination period was 60 days, you would need to be receiving care in a hospital, at home, or in a long term care facility for 60 days in a row before long term care coverage begins. As we’ve mentioned, most policies will pay for coverage up to a daily limit for care. At this point, coverage should be able to continue until you reach the lifetime maximum.
Are there any exclusions to long term care insurance coverage that I should know about?
Most likely. Many policies won’t cover care needs that stem from drug or alcohol abuse. Other exclusions will likely include care needed because of mental health disorders or injuries that are self-inflicted. Make sure that your health conditions now (or anticipated, if applicable) do not prevent you from getting the insurance benefits you paid into.
What happens when I die? Is there a death benefit?
A death benefit is a payment made to a selected beneficiary that the policyholder’s chooses. If it applies, it will usually be a lump sum payment. Most commonly, these are found with hybrid long-term care insurance policies that have death benefits. These have only recently become popular. Therefore, older policies that were purchased years ago probably don’t have a death benefit. What this means is that if the policy is not used, or if it is used partially with benefits still available, the long term care insurance benefits are lost upon death. As we’ve mentioned, most healthcare plans do not cover the majority of costs associated with long-term care. Therefore, it’s crucial to take advantage of your benefits while they are still available.
How do I find home care agencies or nursing homes that take my long term care insurance?
Unlike finding a doctor that accepts one’s health insurance, long term care insurance is different. For example, doctors and providers join health insurance networks, must be qualified through credentialing and other means, and will be considered in network or out of network. To find a provider that accepts your insurance, one will simply need to determine if that accept long term care insurance. This insurance will allow you to select the provider you wish as well, so just make sure to determine first as to whether your preferred provider accepts both your insurance and, if applicable, the insurance company paying out the long term care policy. It’s not always clear if a company accepts your policy upfront, so when in doubt, ask. Chosen Family, for example, accepts all major long term care insurance plans.
Always read the fine print
Just with anything in life, it is important to read the fine print. It is particularly crucial when dealing with long term care insurance. This is because policies can vary dramatically. Even more importantly, the financial impact of long term care insurance can be substantial over the years. That being said, it can be a crucial lifeline to ensure that you get the hands-on care you need, whether it be with home care services or in an institutional setting. It can get you the care you need when you need it and are most vulnerable.
Considering home care services under my insurance policy benefits
Different than traditional health insurance, long-term care insurance is created to cover long-term services and supports. It includes and covers care in a variety of settings such as your home, a facility or institutional care, or other community setting.
These policies will reimburse policyholders a daily amount of money, up to a specified limit, for services to assist them with activities of daily living such as bathing, dressing, and eating. You can select a range of care options that allow you to get both the services you need and where you need them.
One of the most popular options to use long term care insurance for is home car services. This is because home care services allow individuals to remain safely at home with hands-on support from caregivers.
Chosen Family Home Care is a premier provider of home care services in and around Philadelphia, Pennsylvania. Chosen Family Home Care will accept all major long term care insurance policies for caregiving services at home. Plus, we can help complete the paperwork that insurance companies need to make the transition to starting care smooth and painless for you or loved ones. Contact us today for a free consultation and with any other questions about long term care insurance or senior home care services.