Page 21 - Leisure Living Magazine August 2017

The Myths Of
Long Term Care
By Christine Johnston, Nemecek Insurance & Financial Services
Myth #1- A government program will take care of me
Medicare and Medicaid programs are limited by availability and financial resources, making them somewhat difficult to qualify for benefits.
Medicare is available to individuals age 65 and older and the disabled. It generally covers the first 100 days of skilled care in a nursing facility following a 3 day hospital stay. While Medicare may cover some health care following an illness or injury as long as there is progress, it is in no way intended to pay for care associated with the activities of daily living.
Medicaid is a joint Federal and State program providing coverage to 72.5 million Americans including children, pregnant women, parents, disabled and seniors. Their income must meet the State’s poverty guideline. (www.medicaid.gov/ medicaid/eligibility) Determining eligibility is based on taxable income, tax filing relationships and assets that are limited to as low as $4,000 for an individual and $6,000 per couple. Many attempt to spend down or transfer their assets to family members to gain eligibility. States have rules in place to protect against this type of activity and preserve the integrity of the program. There is a “5 year look back” rule in place giving them the authority to examine the past 5 years’ financial transactions of any applicant. Coverage may be denied or penalties imposed if wrongful transactions are discovered. Even trusts that are funded with the applicant’s money can be considered for determining eligibility.
If an individual does qualify for Medicaid and LTC costs are paid on their behalf. Federal law requires the State’s programs must recover costs of benefits paid. They have the authority to obtain funds from the Medicaid recipient’s estate upon their death. They can attach a lien to the recipient’s home in the amount of expenditures, potentially forcing a spouse or children to sell the family home.
Myth #2 - Long-TermCare
policies are use it or lose it policies
Many traditional LTC policies are policies that require the consumer to pay premiums every year and if the benefit was never paid, the premiums paid in were lost to the consumer. LTC policies have evolved. Now there are policies that offer extended care coverage, return of premiums paid, or a death benefit. In some instances if extended care coverage is used, a residual final expense benefit can be invoked as well. Let’s face it, the likelihood of making a claim for some type of assistance on a LTC policy is around 70% (Medicare & You 2015, U.S. Department of Health & Human Services, Dec 2014). This is much higher than virtually any other type of insurance. Do you have homeowner’s insurance? Even if our loans are paid off, we keep the insurance. What about your auto insurance, do you only have state mandated minimum coverage? Why view LTC insurance differently?
Myth #3 - Long-Term Care is nursing home insurance, I don’t want to go to a nursing home
LTC or extended care policies give you more choices and the ability to be in control. We all enjoy being at home in a familiar setting, with our treasures and loved ones. So it should come as no surprise that when faced with the prospect of LTC, 74% of individuals want to receive care at home. In reality more than half of all LTC services are provided in the home. (American Association of LTCI-AALTCI Sourcebook 2015- 2016) Government programs may be limited to a nursing facility or only pay for skilled nursing care in home. With an indemnity-style LTC policy, a monthly check is mailed to the policy owner for the full amount of the monthly LTC benefit. This allows choices in paying care costs; like paying a loved one to assist you with some of life’s everyday tasks, provide you with funds
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