Long Term Care Insurance
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Long Term Care insurance provides you a pool of benefits to help pay for long term care services. Long term care expenses aren't covered by health or disability coverage. A health plan is designed to cover medical care provided by a hospital or doctor; and disability insurance replaces income if you are unable to work. Neither pays for assistance with custodial care also known as activities of daily living (bathing, dressing, eating, toileting, transferring, etc.).

The prospect that we or our family members need long term care at some point in our lives is greater than many of us care to acknowledge. We encourage you to consider this valuable benefit offering.

Who Pays?

A recently published cost of care survey regarding long term care expenses states that the median annual rate for a private room in a nursing home for 2015 is $136,437 in New York, with the costs are expected to continue escalating at 3 to 5 percent annually*.

If you or a loved one is facing a long-term nursing home stay, the cost will most likely be borne by one of three sources: personal assets, Medicaid, or long-term care insurance. Personal assets could disappear quickly for most Americans other than the very wealthy and Medicaid eligibility under current rules requires "spending down" assets to the poverty level. Moreover, many of the techniques (e.g. asset transfers) for shielding what would otherwise be considered countable assets (in order to qualify for Medicaid) have been severely restricted under the deficit reduction act of 2015. Since its passing, Medicaid now looks back 60 months to determine if personal assets should have been available for paying for care and if so will not pay for care for that amount of time.

Furthermore, many people mistakenly believe that Medicare will cover long-term care, but usually Medicare provides only very limited coverage (up to 100 days of skilled care), and generally Medigap Policies will not pay for long-term care at all. Enter private long-term care insurance. Long-term care insurance pays for skilled, intermediate, or custodial care at a specified dollar amount per day for a certain number of days.

Skilled care encompasses around-the-clock care by a registered nurse under a doctor's supervision; intermediate care is occasional nursing and/or rehabilitative care under the supervision of medical personnel; custodial care generally means assistance with activities of daily living (not necessarily provided by trained medical personnel).

The cost of long-term care insurance varies with the comprehensiveness of services included (e.g., all three levels of care; both nursing home and home health care); your age at application; your health; the amount of the daily benefit and duration of coverage selected; the amount of the deductible; and the elimination period (acts like a deductible, the period of time you pay out of pocket for care before insurance benefits begin).

Many of the early long-term care insurance policies (i.e., those written in the 1980's) contained restrictions that led many observers to question their usefulness. In response to these concerns, the National Association of Insurance Commissioner (NAIC) developed a model which establishes minimum standards for long-term care policies. While individual states are not obligated to adopt the NAIC model regulations, most states have done so to varying degrees, and many insurance companies are now basing their long-term care policies on the NAIC model.

Consequently, the NAIC reforms have built a much greater level of consumer protection into the current generation of long-term care policies. However, the regulations are not retroactive, and if you purchased a policy before your state adopted new regulations, you should have it reviewed.

Buying Time

In its simplest form, long-term care insurance protects your hard earned assets for pennies on the dollar. It also allows you or your loved ones to maintain control over the quality of your care, where you receive it in order to maintain the highest quality of life possible. Long-term care insurance allows your loved ones to be your care managers rather than your care providers.

While paying for long-term care can spell financial hardship for the unprepared, it need not do so if you plan now with appropriate long-term care insurance.

*2015 Genworth Annual Cost of Care Survey

Answers about the plan, including eligibility, options, enrollment, customer service and more.

You may enter a nursing home of your choice. However, to be covered by the insurance, the facility must meet the nursing home definition in your certificate.

You and your spouse need to complete and sign individual applications. Each application is considered and processed separately.

You do not need to be hospitalized first to become eligible for long-term care benefits. You need to be certified for benefits and complete the qualification period in order to be eligible to receive benefits for covered charges.

There are several reasons why it may be a wise decision to take advantage of long-term care insurance plans at a young age. You may need long-term care at any age in your life, not just as you get older. Enrolling in the plan now gives you protection against the high costs of long-term care at any time in your life.
Premiums are based on your age at the time you enroll. The younger you are, the lower your premiums will be. Premiums will not increase because you grow older, become ill or use the benefits.

It is not necessary for you and your eligible family member to select the same benefit level. Each applicant should choose the option that best fits his/her needs.

Medicaid has limited resources to pay for long-term care since those receiving long-term care through Medicaid are competing for funds with other Medicaid recipients receiving other types of services. There are strict waiting periods between asset-transfer and application for benefits and to become eligible you have to spend down assets to government required levels. In most states reimbursement is only available for care received in Medicare/Medicaid-approved facilities.

Medicare was designed to pay for acute medical conditions and post-rehabilitative care and was never intended to pay for costs associated with chronic long-term care. To qualify for nursing home care under Medicare, a three-day hospital stay is required, care must be rehabilitative in nature, and skilled nursing care provided only for an acute illness. If these conditions are met, Medicare will pay for the first 20 days in full. Days 21-100 require a co-payment. There is no coverage after day 100.

The policy provides coverage for all levels of nursing home care including skilled, intermediate and custodial nursing care.

Home health care provides home nursing care by an RN, LPN, or LVN, or services provided by home health aides who are certified or employed through qualified home health agencies, physical, respiratory, occupational, or speech therapy, and nutritional counseling, by or under the supervision of a qualified home health agency.

Most HMOs and medical plans offer protection for acute medical care and other short-term needs. Some medical plans may offer limited skilled nursing care as a continuation of acute care. Such coverage is not designed for services received on a long-term basis. The long-term care insurance policy provides coverage for services when they are provided for an extended period of time and are not associated with acute care or short-term illnesses.

Your premiums will not increase because you grow older, become ill or use your benefits. Your premium will be adjusted only if the premiums are adjusted for everyone in your class or group.

We're here to help! Please contact us in whatever manner is most convenient for you.

Program Administrator

Mercer Consumer
12421 Meredith Drive
Urbandale, IA 50398
7 am to 5 pm M-F (Central)

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