About Long Term Care Insurance


Paying For Long Term Care Services

After one selects the proper level of care the individual needs, the next step is determining how to pay for those services. Any nursing facility you are considering should conduct an assessment to help you make this determination and to explain the individual facility’s rate structure.

Proper Planning

One should plan for long-term care the way one plans for retirement. In today’s nursing facilities, forty percent of those admitted are sent home after a rehabilitating stay. But that doesn’t change the fact that 24-hour medical attention, plus food, shelter, and programming offered in a nursing home, no matter how short or long the stay, is a costly proposition for the average taxpayer. Quality nursing home care in Illinois costs $40,000 a year on average, and can quickly devour a person’s savings.

What payment sources are available for people needing long-term care services?

Studies show most Americans believe Medicare, the federal insurance program for people age 65 and over, or their own health insurance plans will pay for long-term care bills, but this isn’t true. People are surprised when they learn that, in Illinois, Medicare pays for less than eight percent of nursing home care, and nationwide is limited to the first 100 days after a hospital stay. Medicare will pay for care under certain limited conditions. To find out if you qualify for Medicare, check with the Social Security Administration for current criteria.

An individual’s continued need for Medicare-funded services is monitored carefully by the Health Care Financing Administration (HCFA), and payment may be terminated if skilled care is no longer justified on a daily basis.

Once someone exhausts the small amount of available Medicare coverage, they must run through whatever personal financial resources they have accumulated in their lifetimes in order to qualify for Medicaid, the program which assists low-income people of all ages. Medicaid funds, which currently pay for care provided to 61% of Illinois long-term care residents, are allocated at the state level and matched by federal funds. Illinois guidelines allow payment for skilled and intermediate care, provided the facility participates in the program.

The requirements for Medicaid eligibility can be complex. A basic eligibility factor for Medicaid is that a person has to spend down their savings to only $2,000. This means less money for a spouse’s nest egg, for children’s inheritances, or for charitable donations.

The nursing facility staff or the local office of the Illinois Department of Public Aid can assist you in obtaining the necessary information about Medicaid.

More people are turning to long-term care insurance to protect assets built up over a lifetime of work and provide peace of mind. A recent study by Deloitte & Touche noted that 60% of people over age 75 will need long-term care services. Long-term care is clearly the number one risk facing elderly Americans – yet it’s the least insured for. Many veterans’ groups, trade unions, fraternal organizations and private insurance carriers offer long-term care insurance plans with applicable benefits. Long-term care insurance plans are economical, especially for purchasers between the ages of 40 and 55. Ask your local insurance agent about the benefits of this type of insurance.

In General

The Insurance Counseling and Assistance (ICA) program provides free help with questions on long-term care costs. If you are confused about Medicare coverage of nursing home services, Medicaid eligibility requirements, or private long-term care insurance, contact the Illinois ICA for help at (800) 548-9034.

No matter who is responsible for the payment of long-term care services, it is important to familiarize yourself with the procedures, finalize all the arrangements in advance, and to secure copies of all financial details. If you believe that Medicaid or Medicare may be a source of payment, discuss this with the facility. Make certain to determine what services are included in the basic rate. Secure a list of all services and charges which are not included in the basic rate and ask whether advance deposits are required.

The State of Illinois requires certain safeguards for resident funds that facilities manage on behalf of the resident. You may want to confer with the facility on the way they handle resident funds.

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