Long-term care is the kind of help you need if you are unable to care for yourself because of prolonged illness or disability. It can range from help with daily activities at home, such as bathing and dressing, to skilled nursing care in a nursing home.
Long-term care insurance helps pay for a variety of supportive services that assist people with health or personal care that might result from a chronic disease, serious accident, sudden illness, or cognitive impairment such as Alzheimer’s disease. Long-term care services are different from traditional medical care because their focus is not necessarily to improve the medical condition of an individual, but to maintain the individual’s quality of life.
Long-term care services may be provided by a health care professional such as a nurse, a home health aide, or other personal care provider. Varying amounts and levels of care can take place in a variety of locations. This can range from a few hours of care per week in one’s home to around-the-clock care in a nursing facility.
Long-term care insurance policies may vary greatly so make certain to review the coverage provided by a prospective policy prior to purchasing. Some policies only cover the care you receive in a nursing home and exclude coverage provided in an assisted living facility. Or it may cover any type of long-term care facility but only at a set dollar amount per month. Some policies provide an unlimited monthly benefit, but a maximum lifetime benefit, and so on. Due to the variations in coverage between long-term care policies, it is imperative consumers understand the different benefit options available to them prior to purchasing a policy.
Medicare and other types of health insurance generally do not cover long-term care. Long-term care insurance policies vary greatly in the amount and scope of services they cover and the settings in which services are delivered.
All policies contain limitations and exclusions. Some exclude coverage for pre-existing conditions for a period of six months. Many policies will not cover long-term care provided by family members.
There are many different services that fall under long-term care, such as institutional care like nursing facilities or non-institutional care such as home health care. Click this link for types of services to learn more about the services associated with long-term care.
In 2017 in Missouri, the annual average cost of a semi-private room in a nursing home is near $58,000. The cost of staying in an assisted living facility is close to $2,700 per month. The average hourly rate for a home health aide or a homemaker is nearly $20. The average daily rate of an adult day care is near $70. These costs are expected to increase for the foreseeable future.
Long-term care policies generally limit benefits to a maximum dollar amount or a maximum number of days. They also may have separate benefit limits for nursing home care and home health care within the same policy. For example, a policy may cover five years of nursing home care and two years of home health care.
It depends on the type of policy you buy. Policies can have an unlimited monthly and maximum lifetime benefit (these are typically the most expensive), or they may have a set monthly benefit, a set maximum lifetime benefit, or a combination of both. If a policy has a set monthly benefit, the plan will pay up to that amount and you will be responsible for any remaining costs associated with your care. For example, if your plan has a $3,000 monthly benefit, but the long-term care facility charges $5,000 per month, the plan will pay $3,000 and you will be responsible for the remaining $2,000. If a policy has a lifetime maximum benefit, once the carrier has paid up to that maximum benefit amount, the policy will cease to pay any further costs associated with your care. For example, if your policy pays $5,000 per month for your care, and your maximum lifetime benefit is $100,000, your policy will cease to pay benefits after 20 months.
Long-term care insurance plans have an elimination period, which is the number of days that an individual must need nursing or home health care before a plan will pay for services. Shorter elimination periods have higher premiums. In addition, a plan will not pay benefits until certain requirements are satisfied. Those requirements are cognitive impairment or the inability to perform a minimum number of activities of daily living, such as bathing, continence, dressing, eating and transferring.
Medicaid is a health insurance program jointly administered and funded by the federal and state governments. It provides health care services for eligible low-income individuals. The Department of Social Services, Family Support Division and MoHealthNet administer the Missouri Medicaid program.
No. Medicare, the federal health insurance program for disabled adults and adults age 65 and older, may provide temporary benefits for nursing home stays, but not for an extended time.
A partnership policy makes it easier to qualify for Medicaid if you have exhausted the benefits of your long-term care insurance policy. Click this link to find out more about partnership policies.
At least 70 percent of people 65 or older will require some long-term care services. However, long-term care insurance isn't for everyone, although everyone should plan for his or her potential future long-term care needs. If you are on a limited income or expect to have little to no retirement savings, long-term care insurance may not be right for you. Some people purchase long-term care insurance to protect assets and to have more choices about where and how they get their services.
There have been a number of measures taken to discourage long-term care insurance companies from under-pricing long-term care insurance policies. Companies must now disclose to prospective buyers their history of premium increases. You need to decide what product options best suit your needs. The cheapest policy is not necessarily the best policy.
As Americans are living longer, long-term care services and expenses will be a major issue for many of us. Long-term care insurance is cheaper when you buy younger, and you'll likely have inflation protection. For example, a 65-year-old who's had a long-term care policy for 15 years will likely pay a lower rate than a 65-year-old who buys a policy today.
Key areas to consider when planning for your future:
The Missouri Department of Insurance keeps a record of each insurance company’s consumer complaint history, known as a complaint index. The higher a company’s complaint index, the more cautious you should be. You can view our Complaint Index Report here. If you have any questions, call the Insurance Consumer Hotline, 800-726-7390.
Missouri Department of Commerce & Insurance
Insurance Divisions
Street Address:
Harry S Truman State Office Building
301 W. High St., Room 530, Jefferson City, MO 65101
Mailing Address:
PO Box 690
Jefferson City, MO 65102-0690
Correspondence with fees:
PO Box 4001
Jefferson City, MO 65102-4001
Main Office Phone Number: (573) 751-4126
