Long Term Care

Non-ADL

Neither sight, cooking or driving is considered an ADL. Don't get tricked by this one.

Spending Down

If long-term care insurance is not affordable, a client might be better off simply spending down his or her assets to qualify for Medicaid. To decide whether long-term care insurance is appropriate, one should consider personal risk factors, financial considerations, and other available alternatives such as living with family. *See Penalty

IADL

IADLs are instrumental activities of daily living (IADLs) such as medication management, housework, and health maintenance tasks.

2 Triggers for LTC

- Chronic illness, which is defined as an impairment that prevents the insured from performing at least two of the six activities of daily living for at least ninety days, or - Cognitive impairment that requires substantial supervision of the insured to prevent him posing a danger to himself or others.

3 Ways to Pay for LTC

- Paying for the LTC out of personal assets and savings, - long-term care insurance, - Medicare and Medicaid

4 LTC Settings

1. Home: the provider is either a home health agency or family or friend. 2. Community: long-term care services can be provided at an adult day care. 3. Residential setting: long-term care services are provided by assisted living communities. 4. Institutional setting = skilled nursing facility.

LTC Pre-Existing Exclusion

• Pre-existing conditions. A pre-existing condition is an illness or disability for which an insured has received previous medical advice or treatment usually within six months prior to the application for long-term care coverage. A long-term care policy may delay coverage on a pre-existing condition for up to six months after the policy's effective date for coverage.

LTC Features

• renewability - guaranteed renewability • non-forfeiture benefits - return of premium or shortened benefit period • waiver of premium while receiving benefits

2 ways to get LTC Eligibility

1. An insured must be unable to perform two of the six ADLs (eating, bathing, dressing, transferring from bed to chair, using the toilet, maintaining continence). 2. Cognitive ability is not an ADL but is another way in which a person may become eligible for long-term care benefits.

LTC Tax Deduction

Jim (age 60) and Connie (age 60) file their 2018 federal income taxes jointly, how much can they claim as a medical expense for itemized deductions for their two long-term care policies? If Jim and Connie own qualified long-term care policies, they each have an annual deduction of $5,200 or total $10,400 in 2018.

What LTC Covers

LTC insurance policies cover skilled nursing home costs, however, the benefits provided under the policy are generally much more extensive, including - custodial care, - home health care, - fees for assisted living facilities, - adult day care, and - hospice care.

The Medicaid Option for LTC

Medicare is not a good option to pay for long-term care because it is limited and restrictive and will only pay for up to 100 days.

Most likely place to get LTC

Most people receive long-term care in their home.

Medicaid Planning Penalty

The Balanced Budget Act of 1997 made it a misdemeanor for planners to assist clients in participating in Medicaid planning.

HI Portability Act Definition of LTC

The Health Insurance Portability and Accountability Act defines chronically ill as being unable to perform two of the six acts of daily living (ADLs). The six ADLs are eating, bathing, dressing, transferring from bed to chair, using the toilet, and maintaining continence.

6 ADLs

The six ADLs are eating, bathing, dressing, transferring from bed to chair, using the toilet, and maintaining continence. Cognitive ability is not an ADL but...

LTC Care provided by family Exclusion

• Care provided by family members or loved ones. Many long-term care policies will not pay members of the family of the insured to provide care to the insured. However, some policies will pay to train family members to be caregivers. They may also cover limited "respite" care to allow family caregivers a "break" occasionally.

LTC Mental and nervous disorders Exclusion

• Mental and nervous disorders. Long-term care insurance policies can exclude coverage of some mental and nervous disorders, but the policy must cover serious biologically-based mental illnesses and other diseases, such as schizophrenia, major depression disorders, Alzheimer's disease, and other age-related disorders. However, a long-term care insurer may refuse to sell a policy to someone already suffering from these otherwise covered exclusions.

Criteria for LTC Claim

1. The insured is unable to perform two of the six ADLs for at least 90 days. 2. The insured has substantial cognitive impairment requiring substantial supervision for his or her protection.

When Employer pays Premiums LTC

Employer payments for long-term care group premiums are Deductible to the employer and not taxable income to the employee.

Qualified LTC

For a long-term care policy to be considered a "qualified" plan, the plan must be guaranteed renewable and offer inflation protection and a non forfeiture benefit. The contract does not have to offer to cover pre existing conditions.

Health Insurance vs LTC

Health insurance may pay the entire bill for a week at a hospital, it will not pay for an indefinite stay at a nursing home. LTC insurance pays for home health care, nursing home stays, and hospice care, and more... Since a year at a nursing home averages nearly $80,000, this type of care can quickly wipe out a financial plan.

LTC Service Options

Long-term care services are provided in a variety of settings: in the home, in the community, in a residential setting, or in an institution (nursing home).

Purpose for LTC

Long-term care services meet the needs of frail, older people and other adults who lack the capacity for self care.

Medicaid

Medicaid is a state and federal assistance program that pays for most long-term care expenses for eligible persons with low incomes. Medicaid pays for approximately one-third of the total United States nursing home expenditures.

qualified LTC chronically ill

Under a qualified long-term care policy a chronically ill person is expected to be unable to perform without substantial assistance of another person, two ADLs for 90 days.

5 LTC Cost Variables

Variables that influence long-term care premiums are age, benefits, location, elimination periods, inflation protection, and additional riders.