Traditional and New Ways to Pay for Long Term Care

When discussing long term care, we typically refer to the help and care that people with chronic illnesses, disabilities or other such variants, including dementia, require over an extended period of time. In addition, employer-based health coverage generally does not pay for daily or extended care services. Medicare can cover a short stay in a nursing home (for rehabilitation) and some at-home care, also for a limited amount of time, and Medicaid only serves those who meet specific income requirements.

So the question begs… what are one’s options for paying for long term care?

Paying out-of-pocket is certainly an option. With nursing home rates eclipsing $200,000/year in Connecticut, this may be an expensive and high-risk gamble. For home care, spending $100,000 or more a year is not uncommon.

To prepare for these expenses, people have historically turned to purchasing a long term care insurance policy. If one purchased a good policy, such as one with inflation protection and multiple years of coverage, several years ago, then they may be well-prepared to weather a financial storm, as these policies typically cover home care, assisted living (sometimes) and nursing home care. If one purchased a policy that does not have these features, then it may not provide as much protection as originally planned. If you have not looked at your policy in a while, then it may be a good idea to dust it off so you understand the level of coverage that you have today. You may also contact the Senior Choice at Home office (203-365-6491), which is well-versed in reading and understanding long term care insurance policies, to schedule a private meeting to review your policy.

If you are exploring the purchase of long term care insurance, here are a few important things to understand:

  • Your age and health are highly examined when applying for a new policy. If you are older and/or have a pre-existing condition, you may not be able to get coverage at all, or you may pay a considerably higher premium. Overall, the percentage to qualify for good health discounts declines with age, and the percentage of declined applications increases with age. In addition, premiums are often a difficult aspect of long term care insurance. As you get older, your premiums may increase significantly. Therefore, if your premiums continue to rise and your income decreases over time, long term care insurance may not be a good option for you.
  • Recently there has been a significant amount of news around the long term care insurance industry. A couple of areas that are garnering attention are the steep rate increases and the introduction of new products, such as hybrid policies. A recent Wall Street Journal article highlighted the difficult position that nearly seven million long term care insurance policyholders are in: pay the hefty premium increases or drop their coverage altogether. In addition, other insurers such as General Electric recently noted that they were having adverse claims experience, resulting in losses exceeding six billion dollars. Overall, the long term care insurance industry was, and continues to be, a difficult model to predict.

Fortunately, there is a “comforting” alternative to long term care insurance; the Continuing Care model, which offers a tiered approach to the aging process. One type of Continuing Care model is Continuing Care Retirement Communities (CCRC), where individuals or couples move to a campus with accommodations for independent living, assisted living and nursing home care. As their needs change, residents can move between levels of care as needed within the campus.  There are various fee models associated with moving to a CCRC, some of which may be quite costly.

The other is the Continuing Care at Home model, which is what Senior Choice at Home is. The fundamental differences are the ability to remain at home and at a much lower price point than moving to a CCRC. Accommodating to our members’ changing needs offers comfort to them, as well as their family, while allowing them to remain at home as long as possible with a wide variety of in-home care, managed and overseen by our team of Care Coordinators. Senior Choice at Home realizes that we are working with people, offering the next level of care that long term care insurance simply cannot provide.

Senior Choice at Home has undoubtedly made a positive impact for nearly 150 (and growing) older adults who call Southern Connecticut home, with lifetime benefits that provide and pay for their future long term care needs (including facility care, if needed). The Continuing Care at Home model has been highly successful for over 20 years, and Jewish Senior Services is fortunate to be able to offer it to active, independent adults (55+) living in Fairfield or New Haven county. In addition, a significant portion of the fees paid can be considered as pre-paid medical care that may be deductible on one’s federal income taxes. It is no secret as to why this is an attractive option for active adults living in the area who want to plan for their long term care, protect their assets and remain at home.

To learn more about Senior Choice at Home, please call 203-365-6491 or email SeniorChoiceHome@jseniors.org.

Posted on 25, April 2018

in Category Senior Choice


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