The Truth About Long Term Care Insurance

Oct 13, 2010  /  By: Roger Levine, Estate Planning Attorney  /  Category: Long-Term Care

Long term care insurance companies would like you to believe that you will loose everything if you face a long stay in a nursing home. While extended care can drain some of your finances it is important to understand the truth about your need for long term care and what LTC insurance actually does before you consider such a policy.

Long Term Care Statistics

Many long term care insurance providers exaggerate the length of time the average person may spend in a nursing home. The truth is, for men over sixty-five, two out of three will never enter a nursing home. Only one out of three women over sixty-five will seek nursing home care. For those who do enter a nursing facility the average stay is around a year and half. Only ten percent of nursing home residents stay for more than three years.

What It May Cover

If you purchase a long term care insurance policy, it is vital that you understand what long term care costs your policy will cover. In the 1990s many people had policies that paid for little or no long term care costs. For some this was due to the fact that they purchased nursing home insurance but received at-home care instead. For others benefits expired before their care needs ended.

The Costs

Long term care insurance is expensive. When purchasing a policy, make sure your premium cost is no more than five percent of your monthly income. Keep in mind that your income will drop after retirement.

Many people let their long term care insurance policy expire when they can no longer afford the premium. If this occurs, you will mos tlikely lose all of the money you have already paid into your policy and you will receive no benefits.

Alternatives to LTC Insurance

Before you sign an LTC Insurance policy, consider your other options. For example, if you have sufficient assets you may be able to “self – insure” which means the income from those assets will be sufficient to pay the nursing home costs. If you are married you must remember that these assets will be needed to pay for the nursing home costs as well as the living expenses of the other spouse.

If you do not have sufficient assets to pay for long term care on your own, Medicaid will help.

Levine & Furman, LLC is a member of the American Academy of Estate Planning Attorneys.

Continuing Care Retirement Communities – One Stop Shopping Solution for Senior Citizens

Aug 04, 2010  /  By: Roger Levine, Estate Planning Attorney  /  Category: Incapacity Planning, Long-Term Care

Continuing Care Retirement Communities, CCRC’s, are an excellent solution to the ongoing dilemma of providing the proper living arrangements to senior citizens as their needs change. CCRC’s offer several levels of living options, assistance and health care for seniors all on one ‘campus’. They normally offer two or more of the following living arrangements within their community:

  • Independent living for residents who require no assistance, normally in lower maintenance housing such as one level homes, apartments or townhomes. Amenities such as swimming pools and fitness facilities are shared as they are in many community settings.
  • Assisted living facilities for those who require some assistance with their normal activities of daily living. Meals are often provided in a group setting while the rooms or apartments offer small or limited kitchen space.
  • Nursing home facilities for those who need short and long term care when additional assistance or medical care is necessary; and
  • An Alzheimer’s unit or memory care facility offering 24 hour assistance and care.

Residents normally move into CCRC’s as an independent living resident. As more assistance becomes necessary, they are able to transfer to assisted living, or in a medical emergency, the short or long term care facility. As the senior citizens’ needs begin to change, they have the peace of mind that living options are available without having to relocate.

Many CCRC’s are managed by not-for-profit institutions. The advantage of the non-profit status is that profit is reinvested within the community rather than distributed to individuals or investors. Not only does this keep the community updated and well kept, but it may allow the CCRC’s to offer living options to a resident who outlives their assets.

CCRC’s normally charge an entrance fee and a monthly fee to residents. One distinct financial advantage of CCRC’s is that a percentage of the entrance fee and monthly fee is often tax deductible as a medical expense, making these comprehensive living arrangements even more attractive as a senior living solution.

Levine & Furman, LLC is a member of the American Academy of Estate Planning Attorneys.

Medicare Benefits – Answers to Commonly Asked Questions

Aug 02, 2010  /  By: Roger Levine, Estate Planning Attorney  /  Category: Incapacity Planning, Long-Term Care, Retirement Planning

Medicare is a Federal health insurance program that falls under the Social Security Program. It provides benefits primarily for people age 65 or older, but people younger than age 65 can qualify for Medicare, including those who have certain disabilities and those with permanent kidney failure.

While Medicare helps with the cost of health care, it does not cover all medical expenses or the cost of most long-term care. Since the Medicare program is complex, we’ve put together a sampling of our clients’ top frequently asked questions.

How do I enroll in Medicare coverage?

Most people assume you contact Medicare, the CMS (Centers for Medicare and Medicaid Services), to enroll in the Medicare program. This is not the case. Your first point of contact is the Social Security program, although you do not have to be receiving Social Security benefits to enroll in Medicare. If you are already drawing Social Security before the age of 65, you are automatically enrolled in Medicare’s Part A and Part B. Your Medicare card is sent to you approximately 3 months before you turn 65. If you will not be receiving Social Security benefits at 65, you have to contact Social Security to enroll in Medicare – they will not contact you.

Is Medicare free?

Medicare consists of several parts, and only Part A is free for most citizens:

  • Part A – Hospital Insurance – free when the individual qualifies for social security benefits.
  • Part B – Medical Insurance – The cost is a monthly premium
  • Part C – Medicare Advantage (Parts A and C combined) – The cost is a monthly premium
  • Part D – Prescription drug coverage – The cost is a monthly premium

While the costs of the coverage may be free or involve premiums, there are often co-pays and additional costs for health care similar to standard insurance policies.

Does everyone qualify for Medicare when they turn 65?

Every U.S. citizen qualifies for Medicare Part A when they turn 65. Even those who do not qualify for Social Security benefits qualify for Medicare Part A, but there may be a premium involved if either you or your spouse worked for less than ten years.

Does Medicare cover long term care?

No! Medicare only offers extremely limited coverage for long term care. While it may cover up to 20 days in a nursing home, a large co-pay amount comes into play after that time. The bottom line determining coverage normally is whether the care offered is medically necessary or strictly custodial, which means the care provided assists with the activities of daily living (ADL).

Part of a comprehensive estate and retirement plan is understanding the Medicare program and planning for the expenses and coverage that it does and does not offer senior citizens.

Levine & Furman, LLC is a member of the American Academy of Estate Planning Attorneys.