Designing a Long Term Care Policy

The Very First Thing To Do

• Personal Health History– Age– Health of self, parents, & siblings– Marital status

• List of medications– Drug– Dose—how much, how often– Why?

Gather Information before you decide on policy type or carrier

• Health

• Marital Status

• Financial Status– Assets– Income– Who will pay premiums?

What Type of Policy?

Indemnity

vs.

Reimburse-ment

Facility Only

or

Comprehensive

One pot

or

Two

Qualified

vs.

Non-

Qualified

Indemnity Policy

• What you buy is what you get

• Not required to offset with Medicare

• Benefits up to $220 or to match expenses

• Claims may be easier to file

Reimbursement Policy

• Reimburses up to 100% of the daily maximum for services received

• Qualified reimbursement policies cannot pay if Medicare eligible

Facility vs Comprehensive

• Nursing Home• Assisted Living

Facility• Alzheimer’s facilities

• Nursing Home• Assisted Living• Adult Day Care• Home Care

– Caregiver training

Qualified vs. Non-Qualified

HIPAA Requirements• Loss of 2 of 5 (or 6)

or• Cognitive Impairment

• Must be expected to last 90 days

• Plan of care

• Certification

• Premium tax deductible

No contract req’mts• Loss of 1 of 7 (mobility)

• Medical Necessity• Cognitive Impairment

• No time req’mt

• Some require plan of care, some don’t

• Premiums not deductible

Looking for an Insurance Company

• Financial Stability– Large– Consistent rates

• Commitment to Long Term Care– In business at least 5 years

How Much Coverage?

• Insure the entire risk– $200 - $300 per day

– Unlimited

– Compound COLA

– 30 day elimination period

• Insure the short fall• Daily benefit less

– Social security

– Less continuing income

– 4-6 year plan

– 90 day elimination

Contract Specifications

• Definitions – “substantial assistance”• Verbal cueing• Stand by• “Hands on” 50% of the time• Continuous “hands on”

• Certification by “medical professional”• Yours• Ours

Making compromises to save $$$

• Higher daily amount vs. longest policy

• At older ages, simple rather than compound COLA

• Facility and Assisted Living without home care

Checking out the Nuances

• Is waiting period waived, or shorter in certain circumstances?

• Is bed reservation for any circumstance?• Is waiver of premium for any benefit or only for

facility? • Is there a weekly or monthly maximum?• How do home care days count? Actual days or

other?• Does help have to come from licensed facility?

Individual vs Group

Individual• Medically Underwritten

• More selection in benefits

• More discounts

• Benefit definitions may be less restrictive

• Payroll deduction and discount may be available

Group• Guaranteed Issue for

active employees

• Limited plan choices

• Some carriers offer NS

• “buy ups” are allowed GI within parameters

• Payroll deduction always available