California Health Insurance

There are different types Long Term Care Insurance Policies. “Indemnity” or “Expense Incurred” policies are most common. When you buy an expense incurred policy, you choose the benefit amount. Regardless of what you spend an “indemnity” or “per diem” policy pays up to a fixed benefit amount. An “indemnity” or “per diem” policy reimburses for the actual expenses for services received up to a fixed dollar amount per day, week, or month.

Another popular LTCI category is the “Integrated Policies” or policies with “Pooled Benefits” where a total dollar amount may be used for different kinds of long term care services. With these kinds of policies there is usually a daily, weekly, or monthly dollar limit for long term care expenses covered. You buy let’s say for example a policy with a maximum benefit amount of $300,000 of pooled benefits. You maximum daily benefit with this policy would be $300 that would last for 1,000 days if you spend the maximum daily amount on care. You can receive benefits for more than 1,000 days if your care costs less than the maximum daily amount of $300.

According to where benefits are paid Long Care Insurance Policies are divided into three broad categories – Home Care Only, Nursing Home and Residential Care Facility Only and Comprehensive. Home Care Only policies cover care in your own home or a community setting. It does not cover care in Assisted Living Facilities or Nursing Homes. It includes benefits for home health, adult day health care, hospice, respite care, personal care and homemaker services.

Costs rising out of care in a nursing home or any place that provides assisted living care as long as this place is licensed as a Residential Care Facility for the Elderly (RCFE) is covered by Nursing Home and Residential Care Facility Only policies. This policy pays for more than just room and board in these facilities. The costs of all long term care services you receive in either of these facilities is paid by this policy up to the policy’s maximum daily benefit amount.

Some of the RCFE include small neighborhood homes also called board and care facilities, retirement homes and specialized community facilities for patients with cognitive impairment (dementia) from Alzheimer. In this kind of policy, the assisted living benefits must equal to at least 70% of the nursing home care benefit.

Expenses rising out of care in a nursing home, assisted living facility, home care and community care (adult day care) are covered by Comprehensive Long Term Care Insurance Policies. Before benefits can be paid LTC Comprehensive policies sold by different companies require different criteria to be met. When two activities of daily living (such as bathing, using the bathroom, dressing eating etc.) can not be performed or you have a cognitive condition that requires supervision, Comprehensive Long Term Care Insurance Policiy will pay you the benefits. The criteria required for the benefits remain as described above whether care is provided in a nursing home, at your own home or in an assisted living facility.

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Your Long Term Care Insurance Policy Premiums are influenced by the type of policy chosen, daily benefit amount to be paid, your age, number of years the policy will pay benefits, choice of inflation protection and the number of days after you qualify for the benefits before the company will start to pay benefits. Few companies will insure you for a higher premium if you have a pre-existing condition. Your LTCI policy premium is influenced by the combination of all the above factors.

Different LTCI companies calculate differently the cost of benefits you choose. This reason can result in significant differences between premiums for similar benefits. For example a company may calculate the premium based on every $10 of the daily benefit you choose. The premium would be $950 per year for a daily benefit of $100, if the company charged $95 for each $10 of daily benefit. With another company the annual premium would rise to $1,500 for a similar package of benefits with a cost of $150.

Your LTCI premium is affected by the method and amount of inflation protection chosen. This nearly doubles the cost for those in their 40s and 50s not expecting to need care for several years. With age your probability of developing health conditions which make you ineligible to apply for new benefits increases but your ability to change LTCI policy diminishes as you age.

You may see an increase in your LTCI premiums over the years. A personal worksheet which explains the rate increases the company has had since 1990 is provided to you by your agent when you buy a LTCI policy. For rate increases for every company that sells go to the California Department of Insurance website. LTC insurance companies found it difficult to increase future premiums when California passed legislation in 2000.

It became mandatory in 2006 for companies filing for premium increases over a certain amount to offer their policy holders the choice of stop paying their premium and keep the benefits equal to the total amount of premiums already paid. Only a small amount of care will be financed by the total amount of premiums you have already paid. You will not lose all your benefits just because of a premium increase you were unable to pay.

By reducing some of the policy benefits you can negotiate with your company for lower premiums. If you have received premium increase notice or you need to lower your premium contact your local Health Insurance Counseling and Advocacy Program (HICAP) office.

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Costs rising out of long term care services are paid by Long Term Care Insurance. Help needed to carry out daily activities like eating, bathing, dressing and using the bathroom etc. when you have a physical disability or cognitive impairment such as dementia caused by Alzheimer’s disease is called Long Term Care. Traditional health insurance, Medicare or Medicaid do not pay for such care. This kind of care is not received in a hospital nor is it intended to cure you. You may need this kind of care for the rest of your life and can receive it in your own home, a nursing home or assisted living facilities.

Medicare aims to provide health services for people 65 or older and is a Federal Health Insurance program. Those who have disabilities under the age of 65, and those dealing with permanent kidney failure requiring dialysis or a transplant are also covered by Medicare. It also covers those suffering from ALS or Lou Gehrig’s disease. Only short term skilled care like inpatient hospital stays, inpatient skilled nursing facility stays, hospice care and home health care receive coverage under Medicare. Some out patient medical services such as doctor visits, diagnostic tests, preventive care and prescription drugs are covered by it. Specialized care in a hospital and for a limited time only is provided by Medicare.

Federal Funds supplement a state based program called Medicaid. In California the Medicaid Program is called Medi-Cal. The poor and impoverished are provided health services by Medicaid according to the state’s guidelines. One must meet the state’s poverty criteria in order to be eligible for Medicaid. Usually this means you need to expend all but $2000 of your assets. Medicaid, a welfare program kicks in only after a person’s assets are gone!

Medigap is a form of private supplemental health insurance policy which increases the amount of health insurance for eligible Medicare recipients. Medigap is provided by private health insurance companies such as Humana, Blue Cross and Blue Shield etc. The 12 standardized Medigap Policies have the same benefits regardless of which private company sells it to you. A part or all of Medicare’s coinsurance and deductibles are paid by Medigap policies. A few Medigap policies cover health care costs which are not covered by Medicare like emergency medical care in foreign countries.

In conclusion, Long Term Care Insurance pays for costs resulting from Long Term Care. To protect your assets and to safe guard yourself and your family in case you need long term care, invest in a Long Term Care Insurance policy.

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Between 1946 and 1964 children born in the US are known as the Baby Boom Generation. 28% of the population is represented by the 76 million baby boomers. 40% of this generation will celebrate their 90 birthday. Some kind of Long Term Care Services at some point in their lives will be needed by 70% of people over the age of 65.

The elderly population will be double what it is today when this generation reaches retirement at 2030. In 2010 the oldest baby boomer will turn 65 and the youngest by 2030. The need for long term care is felt the most when the youngest baby boomer turns 85 by 2050. 30% of Baby Boomers are under the impression that they have long term care coverage.It is unfortunate that those who can afford to purchase a policy have not done so yet.

The financial drain on the government will be profound if Baby boomers who will make up a big portion of seniors needing long term care in the future are not planning for this need today. Medicaid pays 43% of costs for nursing home care for seniors. Medicare and Medicaid will be taking more out of the system future when fewer workers in the workforce will be contributing (tax).

For the baby boom generation informal home care is less of an option than it was for their parents because of today’s life style. Smaller family size, work related mobility, increase in divorce rates and increase in people choosing to remain single are some of the demographic changes which have made informal home care more difficult.

Every baby boomer needs to realize the possibility of needing some kind of long term care at some point in their life. Making long term care a key component in retirement planning will lead to financial peace of mind in old age. Not being in denial that “this can never happen to me” and buying long term care insurance at an earlier age will be cheaper than later. Being realistic and not assuming that the government or family to take care of you will help you choose a long term care plan that best fits you. To not to be a burden to your family and for peace on mind in old age, choose a long term care insurance policy with the maximum coverage.

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Chronic illness and disabilities force people to seek Long Term Care services. Help with daily activities such as eating, bathing, using the bathroom, dressing, moving from bed to chair etc. is termed as long term care. Medicare covers only skilled care and does not pay for help with dailiy activities as it is not skilled care. Help in your own home or in an assisted living centre is not covered by Medicare. Medicaid comes into effect only after all of a person’s assetts, savings and dignity are wiped out.

Long Term Care Insurance pays for expenses resulting from long term care. The need for this kind of care increases with increasing life expectancy. When the last of the baby boomers reach 65 by 2030, 40% of them will live to be 90. 70 percent of people over age 65 will require some kind of help with daily activities at some point in their lives. Any one can have an injury or an accident at anytime and be forced to seek this kind of help.

A shocking 40% of people receiving help with daily activities are working age adults between 18 and 64. Long term care insurance bought at an early age locks in rates which can not be found at a later age. This kind of insurance can not be bought at a time of crisis or only at the time you need it.

Children or family would like to help. But children will have children of their own or cannot quit their jobs to care for their elderly parents. An insurance with the maximum coverage gives you the financial freedom to choose the kind of services you want and where you want to receive it.

No one desires their life savings go towards hospital and assisted living bills instead of their family. With long term care insurance your assets are protected and you will still have your savings to enjoy should you overcome the need for help with daily activities when you recover.

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Your current financial situation, your savings and assets and the freedom to choose the kind of long term care you want are factors to consider when you want to buy long term care insurance policy. Choose a trustworthy Long Term Care Insurance carrier with a sound rating so that it will be around when you want to receive your benefits – in 10 to 30 years. Understand the long term care insurance reviews and claims process of the company and know how many filed claims have been paid by the company.

Your state of residence and the cost of long term care services in your area influence your long term care insurance quote. Seek a Long Term Care Insurance policy that factors in the inflation rate. Find a policy that provides the maximum daily coverage and has non-cancel and guaranteed renewable features. You want to make sure that your policy is there for you when you need it the most. A nursing home care for a day that costs you $140 today will cost approximately $260 in 15 years at 5% inflation rate. You may be left with too little money too late if inflation is overlooked when buying your Long Term Care Insurance policy.

Become familiar with non-cancel and guaranteed renewable Long Term Care Insurance policies so that your policy is not canceled just when you need it the most. A Long Term Care Insurance policy which provides coverage if you become unemployed and works along with your Social Security is preferred.

Consider buying a Long Term Care Insurance policy with an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout – either reimbursement or indemnity. Some Long Term Care Insurance policies allow you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Check out Long Term Care Insurance policies that allow you to receive benefits if you experience an income loss from a partial and/or total disability.

Long Term Care Insurance with the maximum coverage allows you to choose where you want to go instead of having to go where you are taken while still maintaining your financial independence and dignity. Those Long Term Care Insurance policies with fixed premiums which stay in force as long as you pay the premiums are note worthy. Not only are your assets protected by Long Term Care Insurance, but should you overcome the need of long term care, you still have your savings to enjoy when you recover.

Maria Smith likes to write about general insurance and long term care insurance.