The majority of seniors will require assistance as they age. Separate from skilled nursing, the need for nonmedical assistance for Americans developing chronic health conditions, decreased mobility, and/or cognitive dysfunction can imply help with activities of daily living (ADLs). These include bathing, dressing, meal preparation, medication reminders, housekeeping, shopping, toileting, and other daily needs.
The Administration for Community Living estimates that a senior turning 65 today has a 70 percent chance of requiring long-term care in their remaining years. As a family member, you may have asked yourself how a parent is going to pay for this. Does your loved one have a long-term care insurance (LTCi) policy? Long-term care insurance is a valuable tool to protect assets and finance long-term care.
Who Provides Help at Home for Older Adults?
Of the 53 million unpaid caregivers in the U.S., 41.8 million are looking after individuals age 50 and older. So many of those who provide care are family caregivers: adult children juggling jobs, families of their own, and other responsibilities. Relationships, time, and income can become stretched and strained as the senior’s needs increase, especially following a health crisis (injury; terminal illness diagnosis) should it occur. The presence of long-term care insurance cannot be underestimated in shouldering the burden.
At What Age Should You Apply for Long-Term Care Insurance?
The time to apply for LTCi is as early as possible. According to the American Association for Long-term Care Insurance, nearly half of all applicants age 70 and older will be denied a LTCi policy. One-third of applicants between 65 and 69 have also been declined according to a 2022 Milliman Long-Term Care Insurance survey, decisions based on health records including prescription medications. It is important to investigate LTCi options early, including riders to existing life insurance policies which can address long-term care.
LTCi Policy Rates Continue to Rise
With the cost of long-term care is rising, imagine what your parent would pay for a room in a skilled nursing facility. A private room in a nursing home, which is the priciest option for care, can cost more than $9,000 a month. Depending on where you live, continuous in-home care can range from $3,600 to more than $5,000.
Plan for Long-Term Care Before You Need It
Long-term care insurance is an investment to consider before it is needed. Without LTCi, long-term care’s costly expenses are paid using either Medicaid (if you qualify for it) or out-of-pocket savings (if you can afford it). The middle class is in limbo between having too much wealth to qualify for Medicaid and too little to afford long-term care on their own. Long-term care insurance is meant to be a solution.
If your parent is in good health, between the ages of 50 and 65, and able to make decisions about paying for long-term care before they actually need it, it is time to shop for a LTCi policy. Acceptance will depend on:
- Type of Benefits Desired
- Family History
The Health Crisis: Accidents, Terminal Illness, and Chronic Conditions
The unfortunate turn of events that typically prompts the need for sudden long-term care is a health crisis. This can occur at any age and to a person in any state of health. Accidents and terminal illnesses are just a few of the health crises that compromise healthy people for the rest of their lives. Seniors are especially at risk for these situations, in addition to common debilitating ailments such as cognitive decline, cardiovascular disease, respiratory disease, falls, influenza, pneumonia, and Alzheimer’s disease. Should their loved one be hospitalized, families hope to find relief following discharge. Without LTCi, however, they may find themselves short of the resources to provide care for the senior’s needs at home.
Activating the LTCi Policy After a Health Crisis
After a health crisis, or under other circumstances when deciding long-term care is necessary in general, a senior with LTCi can activate their policy as soon as they qualify. Determinants include:
- Cognitive impairment
- Unable to bathe, dress, or eat without assistance
- Unable to move on their own
- Unable to toilet independently
What Policyholders Need to Know About the Elimination Period
There are several things for you and your parent to know when activating their LTCi policy. Know how long the elimination period is for the policy. The elimination period is essentially a time-based deductible where you are responsible for paying the full portion until coverage begins. Elimination periods can range from zero to 100 days. Knowing the elimination period ahead of time not only provides information about what policies to choose in the first place, it also cues you to prepare out-of-pocket resources for care during its time span.
Know the policy’s maximum daily benefit and maximum lifetime benefit. The maximum daily benefit is the amount a policy will reimburse for each day of long-term care. Look out for inflation riders on the maximum daily benefit, which can significantly increase it over time. The maximum lifetime benefit is the total amount of time or money up to which benefits will be paid. Policies can state the maximum lifetime benefit in either days or dollars. Know which one your parent’s plan uses. Also look out for a Restoration of Benefit, which allows your parent to restore benefits if they are not fully maximized.
If your parent has already purchased a long-term care insurance policy, it helps to know what specific benefits their plan covers. The Genworth 2022 Cost of Care Survey outlines types of long-term care that seniors can get, as well as their costs. Research the types of care covered by your parent’s plan and be assertive in commissioning the best agencies to provide them. If your parent is like most seniors today, they may prefer long-term care at home. Securing this care entails knowing the coverage the LTCi policy will afford.
Ready to initiate activation of a LTCi policy? These are the steps to take:
- Call your parent’s insurer and request a claims packet.
- Fill out the claim form and send it in.
- Make sure to list the information of the company providing care and their tax ID.
- Check to see if the policy requires a doctor to fill out a form documenting your need for care.
- Check to see if your parent needs an assessment from a registered nurse (RN).
Maximizing the Benefits of a Long-Term Care Insurance Policy
Once the claim is approved, you want your parent’s benefits to be maximized under the reimbursement they receive. Achieving this involves detailed monitoring of invoices and providing notes your insurer needs to keep the claim active. Ensure that each invoice you receive from providers, such as caregiver agencies, is submitted to the insurer. Each invoice must have notes documenting the fact that assistance with your parent’s ADLs is provided each day.
Aside from the degree of diligence that goes into purchasing and activating a policy, long-term care insurance is sometimes disappointing when the coverage is unpredictable. What if your parent never qualifies? What if the claim is not approved? What if it is, but the insurer ultimately decides your parent no longer qualifies and cancels it?
Get Help From Your Trusted LTCi Partner
You are not alone. Amada Senior Care is the resource and one-stop shop for long-term care insurance advocacy. Amada Senior Care locations across the U.S. provide a Concierge LTC Resource Center of experts who help policyholders understand and verify their long-term care insurance benefits. When you become an Amada client, our senior care advisors will guide you through the process of reviewing and filing a claim so you can start receiving your benefits as soon as possible at no cost to you. Our advocates will:
- Identify and analyze the requirements of your policy, including elimination periods, daily maximum, lifetime benefits, and coverage.
- Assist policyholders in completing the necessary forms to file a claim.
- Bill the LTCi carrier directly at policyholder’s request.
- Aid in the responsibilities of payroll taxes, benefits, scheduling, bonding, workers’ compensation, and general and professional liability insurance.
Amada Senior Care has established relationships with multiple LTCi carriers and third-party administrators to make the claims process easier. The Concierge LTC Resource Center will not only assist you and your loved one with the details of your policy, but will also coordinate and deliver care – providing peace of mind and the opportunity to continue enjoying a close family relationship without the burden and stress brought on by complex changes at this important time of life.
“Navigating Long-Term Care Insurance for Aging Parents,” written by Michelle Mendoza and updated by Beth Herman, Amada blog contributors.