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By John M. Bigler Long-term care insurance is an alternative for seniors faced with the realistic possibility of long-term catastrophic care. In previous articles, I have discussed some of the possibilities of using government benefits such as Medicaid and Medicare to pay for long term-care. However, as those articles hopefully pointed out, there are problems in relying on government benefits. If Medicare benefits are obtained, it covers just the first 100 days in a nursing home. Although Medicaid can cover an unlimited period of time in a nursing home, one must divest themselves of their assets in order to qualify.
It is important to be sure to obtain enough daily coverage to make the policy worthwhile. Many seniors make the mistake of purchasing policies with limited daily coverage only to find that when a nursing home stay is needed, they will still have to make a Medicaid application so as to pay the difference between the insurance payment and the actual nursing home cost. Additionally, there is an initial elimination period upon entering the nursing home depending on the cost of the policy. Those who purchase the policy with a longer period of time between the purchase of the policy and the actual admission to the nursing home will benefit greatly because the premiums will be less expensive. For a senior who is aware that Medicare benefits can be available to pay for the first 100 days, it makes sense to purchase the cheaper policy with a 100-day waiting period prior to the start of benefits. Another consideration in choosing a long-term care policy is whether to purchase a New York State partnership policy, often referred to as the Robert Wood Johnson Project. This policy is only offered in New York and three other states and is a combination of long-term care insurance and Medicaid. The partnership policy must provide certain minimum standards of coverage in benefits. It must cover at least $100.00 per day in the nursing home and $50.00 a day at home. It must also cover at least three years of nursing home care and six years of home care. Once the benefits of the policy have been utilized, then the policy owner is automatically eligible for Medicaid regardless of the amount of assets still in that person's name. This could be useful for individuals who are not interested in divesting themselves of their assets. However, there are certain disadvantages associated with the partnership policy. For one, the policy is typically more expensive than the standard long-term care insurance policy. Second, the individual's income is not protected once Medicaid eligibility has been established. All of the individual's income including interest income generated by the assets must be paid over to the nursing home or budgeted in determining home care eligibility. Also, if one leaves New York, the Medicaid portion of the policy is no longer effective. There must be a return to New York in order to access the Medicaid portion of the program. For many seniors, long-term catastrophic insurance is not an option. Some are too old or have pre-existing illnesses which make them ineligible for the policy. Many could not comfortably afford it. It does not make sense to purchase a policy only to let it lapse after several years of payment because of the inability to afford it. However, for younger seniors who are in good health and who have significant assets, the long-term care insurance policy could be a viable alternative to the uncertainty of relying on government benefits. Reprinted with permission of the Suffolk Times © 1999 [ Contact Us ] [ Guestbook ] [ Email ]  The Law Offices of John M. Bigler, Attorney At Law 1421 Wantagh Avenue, Wantagh, New York 11793-2206 1-888-ELDER-LAW · 516-409-6565 · Fax: 516-409-6522 E-Mail: info@biglerlaw.com · Web Site: www.biglerlaw.com |
For many seniors who have the opportunity to plan ahead, long term catastrophic insurance is an alternative to be considered. In New York, long term care insurance policies have improved over the last several years. These policies will now normally cover both skilled and custodial care. When purchasing a long term care policy, one needs to determine the dollar amount of daily benefits. For instance, $200.00 a day for nursing home care and $100.00 of daily benefits for home care. It is also necessary to determine the length of time the policy will cover in a nursing home. Policies normally provide for three years, five years or a lifetime worth of coverage. Most of the policies have an automatic inflation provision which increases the daily payment on a regular basis.