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Long Term Care

Introduction to Long Term Care

Long-term care helps people with chronic conditions, such as a prolonged illness, disability or cognitive disorders (such as Alzheimer’s disease) compensate for limits on their ability to live independently. A variety of medical, personal and social services are available, ranging from in-home care, to care at a skilled nursing facility, care in an assisted living facility or nursing home. Family members often provide long-term care as well. Long-term care differs from traditional medical care as it is designed to assist a person to maintain his or her level of functioning, as opposed to care or services that are designed to rehabilitate or correct certain medical problems.

Paying for Long Term Care

Long-term care can be expensive. Medicare and Medicare supplement policies generally do not pay for extended long-term care services. Medicaid may pay most long-term care expenses for eligible beneficiaries.

A long-term care insurance policy may pay some of the costs for your care in a nursing home, assisted living facility, adult day care, or home care.

Some long-term care policies qualify for a deduction on both your state and federal income tax returns. You may be able to deduct your premiums from your income taxes in the same way medical expenses are deducted. For more information, contact one or more of the following:

  • Your insurance agent or company
  • Your tax consultant
  • The Internal Revenue Service

Things you should know before buying Long Term Care Insurance

  • Long-Term Care Insurance – A long-term care insurance policy may pay most of the costs of care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read the policy and make sure that you understand what it covers before you buy it. You should not buy a long-term care policy unless you can afford to pay the premiums every year. Remember that the company may increase premiums in the future.

  • Medicare – Medicare does not pay for most long-term care.

  • Medicaid – Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid.Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services.

    When Medicaid pays your spouse’s nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets.

    Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency.

  • Shopper’s Guide – Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners’ Shopper’s Guide to Long- Term Care Insurance. Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy.

  • Counseling – Free counseling and additional information about long-term care insurance are available through your state’s insurance counseling program. Contact your state Senior Health Insurance Benefits Advisor (SHIBA) in your area.

Should you buy Long Term Care Insurance?

Not everyone should buy a long-term care insurance policy. For some, a long-term care policy is an affordable and attractive form of insurance. For others, the cost is too great and the benefits they can afford are insufficient. Buying a long-term care policy should not cause a financial hardship. Each person should carefully examine his or her needs and resources to decide whether long-term care insurance is appropriate.

The need for long-term care can arise gradually as a person needs more and more assistance with the activities of daily living, such as bathing and dressing, or the need can surface suddenly following a major illness, such as a stroke or a heart attack.

Whether you should buy a policy will depend on your age, health status, overall retirement objectives and income. For instance, if your only source of income is a minimum Social Security benefit or Supplemental Security Income (SSI), you should not purchase a policy. Also, if you have trouble stretching your income to meet other financial obligations, such as paying for utilities, food or medicine, you should not purchase a policy.

On the other hand, people with significant assets may wish to buy a long-term care policy if they want to save these assets for family members. Many people buy a long-term care policy because they want to maintain their independence and not burden their families with nursing home bills or rely on state assistance. If you have existing health problems that are likely to result in the need for long-term care, Alzheimer’s or Parkinson’s disease, for example, you will probably not be able to buy a policy.

Long Term Care Insurance Partnership Program

The Idaho Long-Term Care Partnership Program is a program that involves state government and private insurers. Its purpose is to encourage people to prepare for their future care needs by purchasing insurance that pays when a person must be moved into a long term care facility like a nursing home.

Under the Partnership Program, the state will disregard the policyholder’s personal assets equal to amounts paid out under a qualifying insurance policy when it determines the person’s eligibility for Medicaid assistance. For example, if a qualifying insurance policy pays out $50,000 in benefits to cover a person’s long-term care needs, Medicaid would not count up to $50,000 of the person’s assets when it determines whether the person is eligible for Medicaid assistance with long-term care costs. This means the person would be able to qualify for long-term care assistance through Medicaid without first having to spend all their personal assets on care.

It is important to remember that only certain types of long-term care policies qualify for the Partnership Program and the state and federal laws governing the program are subject to change. If you are considering purchasing long-term care insurance, you should talk with your agent about whether a Partnership Policy is appropriate for your needs.

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