Long-term care insurance is different than typical commercial health insurance. While typical health insurance, such as employer sponsored plans or Medicare, pays for doctor’s visits, hospital stays, medications, etc., it does not cover regular, ongoing companion or personal care attendant levels of in-home care. The visits covered by Medicare or typical health insurance are limited to 45 minutes or so, are not regular and last typically less than two months after a health event or hospitalization.
Long term care insurance helps subsidize part of all of an individual’s charges for having a companion/caregiver/personal care attendant in the home. Having the long term care insurance often allows individuals to access care earlier in the disease or aging process, or it allows individuals to have more care than they could afford paying entirely from their savings.
Currently, about 25% of At Home Nursing Care, Inc. clients have long term care insurance that helps them pay the cost of in home care. Most clients purchased long-term care insurance when they were in their 50s and 60s either through their work or through an insurance broker. They paid annual premiums for years until they hit a point in life when they needed in home care. Then the premiums stopped and the insurance coverage began, sometimes augmenting financing of the in home care and sometimes paying for all of it.
The cost of long-term insurance varies depending on the age and health condition of the beneficiary at the time of application, along with the coverage amount and so-called elimination period. It’s common for a married couple in good health in their late 40s or early 50s to pay roughly $4400 a year for a long term care policy that will give them up to $800,000 in long term care benefits. A man in his late 50’s may pay $3500 per year for $400 a day in benefits once he needs it.
As with all insurance, some people pay the premiums for years and then never access the benefits if they pass away unexpectedly.
The elimination period is the time when in-home care or assisted living begins and is paid for solely by the beneficiary before the long-term care benefits apply. Some elimination periods are as long as three months, others are as short as two weeks. It depends on the individual policy. There are also daily limits, weekly limits or monthly limits to the long term care coverage, depending on what the client purchased.
It’s important that someone other than the beneficiary be listed as an alternate contact on the long-term care insurance policy. This ensures continuation of the policy and payments in case the beneficiary develops memory impairment or faces a health emergency. Failure to keep up premium payments can lead to cancellation of the long term care policy, despite years of premiums having already been paid.
Below is a list of long term care insurance companies that At Home Nursing Care, Inc. has worked with over the past ten years:
Brighthouse Financial Long Term Care
Continental General Long Term Care
John Hancock Life Insurance Company
Lincoln Financial Long Term Care
Mutual of Omaha Long Term Care
NY Life Insurance Company – Long Term Care
Northwestern Mutual Long Term Care
Senior Health Insurance Company of Pennsylvania
Other ways to finance in home care include using VA benefits for veterans, or hiring quality care through a home health agency, but beware of the dangers of illegal pay and the resulting employment liability that can be an unintended consequence.