Elder Law: Long-Term Care Insurance – Program Overview

Long-Term Care Insurance: Program Overview

By: Alan G. Orlowsky

As more seniors are living longer, many are considering whether long-term care insurance is the right choice for them. However, a lot of seniors are unaware of what long-term care insurance consists of, what types exist, and what considerations to make when purchasing a policy. This article serves as a brief overview on long-term care insurance and what you should be considering when deciding whether this type of insurance is right for you.

What is Long-Term Care?

Long-term care covers a variety of services, both medical and non-medical, for elderly people suffering from a chronic illness or disability. Typically, this type of coverage provides hands- on assistance or stand-by assistance with activities of daily living, such as dressing, eating, bathing, toilet needs, or transferring. It also includes services provided for home health care, respite care, hospice care, or adult day care.

Long-Term Care Insurance

Long-term care insurance is one option for paying for long-term care. The policy pays for or reimburses you for your long-term care needs. The Health Insurance Portability and Accountability Act (HIPAA) do give some federal tax advantages to people who purchase long-term care insurance, known as “qualified policies.”

There are many different types of long-term care insurance policies. These policies can be purchased privately or through employers, or interested parties may obtain benefits tangentially through other policies. These include:

Individual Policies

An individual policy can be purchased through an insurance agent, through the mail, or over the telephone. Policies within the same insurance company and in different companies can have vastly differing benefits, so be sure to shop around.

Employer Policies

Employers may offer group or individual long-term care policies at a discount through your work. More employers are now offering these policies because HIPAA is granting them tax benefits in exchange. Many employer plans also let retirees, parents, spouses, and in-laws apply for the coverage. Insurance companies usually let you keep the plan if you leave your job, are fired, or if the employer cancels the coverage.

Federal or State Government Policies

Federal employees and their families can sign up for long-term care insurance through the Federal Long Term Care Insurance Program. Some states also provide plans for their governmental employees, as well.

Association Policies

Many associations allow insurance companies to offer long-term care policies to their members. Like employer plans, association plans often give members a choice of benefits. However, you should review what happens if you decide to leave the association or if the group decides to cancel the plan.

CCRC Policies

Continuing Care Retirement Communities offer or require that their residents have long-term care coverage. Under this type of policy, you must be a resident or on the waiting list, and you must meet the medical requirements.

Life Insurance or Annuity Policies

Some life insurance policies have built-in benefits to cover long-term care. Some insurance companies also allow you to attach a rider onto a life insurance policy that is specifically for the benefit of long-term care.

Long-Term Care Insurance Partnership Policies

This type of policy helps a participant with the financial burden of spending down to meet Medicaid eligibility requirements. The partnership protects the insured from the Medicaid requirement to spend down to become eligible. Each partnership is different depending on the state, so be sure to check your state’s specific requirements.

Contact an Elder Care Attorney Today

If you or someone that you know has questions regarding long-term care insurance or other issues of elder law in Northbrook, Skokie, Evanston, Glencoe, Glenview, or the Highland Park area, let the experienced attorneys at Orlowsky & Wilson, Ltd. help. Call or contact the office today for a free and confidential consultation of your case.

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