LTC Misconceptions

There are some misconceptions about LTC that need to be addressed.

1.       Many people think that the typical LTC recipient is an elderly person living in a nursing home.  This is false.  Nursing home care represents less than 15% of the LTC being provided today. Long-term care provided in your home, adult day care and assisted living facilities represent 85%.

2.       LTC is only needed for people over 65.  This is false.  Forty percent of people needing LTC are working-age adults between the ages of 18 and 64.  Young people need LTC for many reasons: accidents (car, skiing, boating), multiple sclerosis, brain tumors, AIDS, Alzheimer’s or Parkinson’s disease, etc.

3.       Strokes happen to people over 65.  This is false.  Approximately 33% of the 700,000 Americans who have a stroke every year are under 65.  (Stroke is the country’s # 3 killer, but it is the # 1 disabler.) Source: U.S. News & World Report, 3/15/99.

4.       My health insurance covers my LTC.

My individual health insurance, group health insurance, Medicare and Medicare Supplement policies cover LTC.  This is false.  Private and group health insurance policies only cover skilled care.  Once your care becomes maintenance, or chronic care with no progress, benefits stop for nursing home and health care under conventional health insurance.  You can be totally paralyzed, be in a coma or have Alzheimer’s.  The care you would receive is custodial care and since this is not skilled care, your health insurance would not provide coverage.  We will discuss Medicare and Medicare Supplements later on.

5.       I am 65 and I have Medicare.  It will take care of ALL my LTC needs. False. Medicare’s nursing home benefits are limited in coverage.  Medicare can approve up to 100 days in a nursing home following a 3-day hospital stay. If Medicare approves a nursing home stay, it pays 100% of the first twenty days.  In the 21^st to 100th day it pays after a $95.50 per day deductible.  If you qualify for Medicare from the 21st to the 100th day, your out-of-pocket expense would be $7,640.00 plus any other items that Medicare would not cover. After 100 days Medicare provides no additional help when it comes to LTC.

6.       Medicare coverage for LTC is an automatic coverage.                        In order to qualify for Medicare there are things that you must do.  Medicare requires a three-day hospital stay not counting the discharge day.  You must go to a nursing home within 30 days after leaving the hospital for the same diagnosis.  You must go to a Medicare-approved facility.  And you must receive daily skilled care. Medicare home health benefits are limited.  For Medicare to approve home health benefits, you must use a Medicare-approved home health agency, must have some skilled care, and must be homebound.  Medicare pays only for visits of usually one or two hours in duration; no eight hours a day shift.  If you are receiving custodial care and no skilled care, Medicare provides no coverage. Medicare Supplements (Plans C – J) will pay the daily copayment (deductible) of $95.50 in a nursing home if Medicaid approves the stay. The care must be skilled and not custodial.

7.   I am never going into a nursing home, so I do not need long term care insurance.

      I know of no primary caregiver, even if they do not work outside your home, that can provide 24-hour care.  A long-term care insurance policy with great home benefits may be the only thing that keeps you out of a nursing home by providing monetary and emotional support to the people who care about you so they can keep you at home. 

A policy with great home care benefits can provide the money to pay for a home health aide to stay with you for an 8 to 10 hour shift while your primary care giver is at work. The aide can help with daily care such as bathing you, changing your bed, washing your hair, preparing meals, and administering medicines. Even when the primary caregiver does not work, an LTC insurance policy with great home care benefits may be the only way the primary care giver gets any rest.  No one can provide 24-hour care without rest.

8.         My children will take care of me.

Your children tell you not to worry; they will take care of you.  Is this what you want?  Will your children have to quit their jobs to take care of you?  If you live with your children’s family, how much change in their lives are you willing to cause?  Do you want to become a burden to your children?  When you were raising your family you made the decisions.  The roles will be reversed when your children make decisions for you.   Are you willing to give up your independence?

According to a survey of people over 65 commissioned by SCAN Health Plan, a California based health plan 41% of the respondents rely on their children or their daughter-in-law for care.  SCAN noted that the National Alliance for Caregiving and the Association of Retired Persons found in the study that 31% of the caregivers significantly changed career paths and many have to leave the work force. 

A study done by Brandeis University’s National Center on Woman and Aging found that over an average lifetime, the typical caregiver gives up $659,000 in wages, Social Security benefits and contributions.

As time goes on your family will need some additional assistance to take care of you. Professional assisted care can be very expensive.  Your children love you, but will this love cause them financial strain?

A LTC Insurance Policy can provide the money so that your children can take care of you with little interruption in their own life style.  This way nobody is out-of-pocket for the huge cost of your care.

Long-Term Care Insurance can be expensive.  You can compare it to buying a car.  The base model costs you so much.  Then when you add the upgrades, the cost of the base model goes up.  Your LTC plan has to be custom-made to your specifications.  Some people only want the base model and some want it loaded with all the options.

The one thing that should be taken into consideration is that the cost is less the younger you were when you took out the policy. The overall costs depend on the amount and type of care you need and where you get it.  In 1997 the average cost was more than $46,000 for a year of nursing home care.  For an 8 to 10-hour shift, the daily cost for home health care can be as much as an average day’s stay in a nursing home.  The average cost per day in a nursing home varies from state to state.  For example, as of a February 1999 Kiplinger study, the state with the lowest statewide daily LTC costs is Louisiana with $90 a day, and the state with the highest is Alaska with $413 a day.  

For an age versus cost comparison, this illustration shows the cost for a husband and wife who are both non-smokers at various ages.  The plan will remain the same: $150 a day benefit for nursing home/home care (100% home health care benefit), preferred classification, 3 year benefit, 90 day elimination period (deductible), with no inflation protection.

Husband & Wife Age        Annual Cost

 45           $764.40

 55           $1,048.32

 65           $2,162.16

 75           $5,678.40

By waiting from age 60 to 70, the risk of rejection can actually increase from 50 percent to 100 percent. The one thing to remember when looking at any LTC insurance policy is that your money pays for LTC insurance, but your health buys it.