More myths and facts about long-term care
Here are a few more misconceptions regarding long-term care, with a focus on long-term care (LTC) costs.
Myth: Most LTC costs are paid by Medicare, the federal health insurance program for those age 65 or older.
FACT: Because Medicare is health insurance for those over 65, many assume LTC is included in the coverage; however, Medicare does not pay for LTC. Medicare coverage focuses on treating acute, short-term illnesses. Although it may include nursing home and home care (certain medical needs), it is for a limited time (less than three months).
Myth: My existing insurance will pay if I need LTC.
FACT: Studies suggest that almost one-third of consumers think they are covered by an existing insurance of some type, but they are not. It is a myth that health insurance policies will cover LTC costs. Medicare supplement policies are not designed to do so. Disability insurance typically protects against the loss of income due to a disability. But this type of insurance does not pay for the supportive services or the daily living help a person may need to remain independent. Long-term insurance policies are designed to cover a range of LTC services.
Myth: Most people are buying LTC insurance to protect themselves.
FACT: While the number of people purchasing LTC insurance has grown in the last decade, current estimates suggest about 10–13 percent of Americans over age 55 have LTC insurance coverage. Private and public employers are increasingly offering group LTC insurance coverage as a benefit option for their employees.
Myth: LTC insurance will protect against all possible costs associated with LTC.
FACT: There are no LTC policies on the market that will guarantee that all costs for
LTC will be covered during one’s lifetime. Policies often limit coverage to specific settings, for specific lengths of time, and to specific dollar amounts per day. Compare exclusions and limits carefully when shopping. Keep in mind that LTC insurance can complement other financing alternatives, such as self-insuring.
Myth: Everyone can depend on Medicaid (Medi-Cal in California) to pay for a range of LTC services.
FACT: Medicaid is not designed to pay for LTC expenses for all people, regardless of income and assets. Medicaid or Medical Assistance is a federal and state government program that serves as the safety net for individuals who need LTC and meet the low income and asset eligibility criteria. There are various services potentially available under Medicaid Waiver programs, but varies dramatically across the 50 U.S. states. This can affect consumer choices.
Myth: There is no value in having LTC insurance if I use up all the benefits and still have to “spend down” my assets to qualify for Medicaid.
FACT: A majority of states now offer a LTC Partnership Program. Partnership programs are designed to protect consumers from having to become impoverished to qualify for Medicaid—thereby saving the state’s limited Medicaid resources. If a consumer takes personal responsibility and purchases an approved LTC insurance policy, then the State guarantees that if benefits from the LTC policy do not cover the cost of LTC, the consumer may qualify for Medicaid while retaining a predetermined amount of assets.
Myth: “My greatest asset is the equity in my home, but the only option I have is to sell my home to get to this money.”
FACT: A reverse mortgage is a loan against the equity or value in a senior’s home that does not have to be paid back as long as the senior lives in the home. The money is repaid, plus interest, when the senior dies, sells the home, or permanently moves out of the home. In certain situations, reverse mortgages can work well, but they are not for everyone. Recent changes in home values and the current real estate market are critical factors to consider.
Frank M. Samson, CSA is a Certified Senior Advisor and Founder of Senior Care Authority based in Sonoma (Seniorcareauthority.com.) The company provides support to families throughout California in helping them locate the best In-Home Care, Dementia Care, Independent and Assisted Living for their loved ones. Frank also hosts “The Aging Boomers” on KSVY 91.3FM and Sunfmtv.com. Reach him at .939.8744 or Frank@seniorcareauthority.com.