Contra Costa Lawyer July 2016, Healthcare and Insurance

Page 13

Long Term Care Insurance

What exactly is Long Term Care Insurance (“LTC”)? When someone talks about LTC, there is much confusion between the difference between LT, and Medicare. Many people believe that once they qualify for Medicare, any and all long term care expenses will be covered. The truth is, Medicare only covers LTC for short periods of time, such as rehabilitation after an injury or illness. Once an individual is deemed recovered, Medicare does not pay any more. This doesn’t necessarily mean that an individual is back to 100% of the way he or she was before they were hospitalized. It just means that the doctors believe that an individual has medically recovered. Now, it’s a matter of rehabilitation, and there are strict limits as to what Medicare will cover. Medicare does not cover assistance with activities of daily living (ADLs) that many older adults need to maintain their independence. There is something called Medicaid (Medi-Cal in California) but it will cover nursing home and convalescent care only if the individual’s income is below a certain level, and after an individual has used his/her savings. The biggest stumbling block to LTC insurance is the negative association with aging, and with nursing homes. People do not like to talk about, nor think about getting older, and having to live in a nursing home. What people don’t realize is that many current LTC policies have a home care benefit, which is designed to help keep them out of a nursing home. Policies can pay a home care benefit of up to 100% of the nursing home benefit. That means if someone purchased enough benefit, the money can be available to bring a licensed professional into their home to care for an individual 24 hours a day, seven days a week, if needed.

So while having the coverage will not decrease the need for care, statistics say it will shorten the length of time in a nursing home, while lengthening the life of an elderly person, and providing them the option of being able to live out their final days in the comfort of their own home. The other misconception is that LTC insurance is only for older people. Many consumers would rather wait until they are older to purchase it. However, while it is true that the majority of people on claim for LTC are over the age of 80 (63.7%) 25.4% are between the ages of 70-79, and 10.6% are between the ages of 50 and 69, according to the American Association for LTC insurance. American Association for LTC goes on to state that in 2014, 71% of the claims that were opened, contained some kind of in-home care benefit. The other problems associated with waiting until someone is older to purchase LTC are cost and health factors. Not only can the cost skyrocket after the age of 70, but if someone develops a serious health condition, it could prevent them from qualifying for LTC insurance no matter how much they are willing to pay. Just like with any good financial or business planning, there is not always an obvious right or wrong answer. Every company and individual must determine what is best for them. It is always a good idea to discuss these types of coverages with a trusted insurance advisor, and make certain that all of the options have been reviewed. It is good to have a plan, because things don’t always go as planned. s Steve Brandel is the Executive Director of the Heffernan Life Insurance Division, a division of Heffernan Insurance Brokers located in Walnut Creek. He has over 25 years of executive planning and insurance experience in the areas of Life, Disability, and Long Term Care products. Steve Brandel graduated from San Jose State University in 1985, with a degree in Marketing and Speech Communications. He currently resides in Danville with his wife and three children.

This has had a huge impact on the quality and length of life people have had while receiving care. Elder Web, an award-winning online elder care source book, maintains that back in 1999, overall average length of stay for an elderly person living out the rest of their life in a nursing home, was 901 days, which is 30 months or about 2.5 years. However, when people had the capability to be disL A W O F F I C E S O F charged to their homes, the statistic DAVIDÊA. ARIETTA drops to 388 days, or just over one Certified Specialist, Bankruptcy Law year. In 2014, the American AssoCalifornia of C LegalE Specialization L State A Bar W of Specialist O F Board F I Bankruptcy S OLaw F Certified ciation for LTC insurance stated that Comprehensive Bankruptcy Assistance State Bar of California Board of Legal Specialization David A. Arietta the average length of a LTC claim for Individuals and Businesses 20 years of experience paid by and insurance company is Rated AV Preeminent Martindale-Hubbell Certified Specialist, Bankruptcy Law Assistance 700 Ygnacio Valley Comprehensive Road 3.9 years. This tells us that people (925)Bankruptcy 472-8000 State Bar of California Board of Legal Specialization Suite150 for Individuals and Businesses with the capacity to receive their David @ Walnut Creek, CA 94596 David A. Arietta Comprehensive Bankruptcy Assistance David A. Arietta care in home, are staying in nursing 20 years of experience for Individuals and Businesses 20 years of experience homes 1.5 years less, and living at 700 Ygnacio Valley Rd., Ste. 150 Rated AV Preeminent Martindale-Hubbell L Rated A WAV Preeminent O F F Martindale-Hubbell I C E S O F Walnut Creek, CA 94596 home 2.4 years longer. (925) 472-8000 700 Ygnacio Valley Road (925) 472-8000 Suite150 David @ Walnut Creek, CA 94596



Certified Specialist, Bankruptcy Law State Bar of California Board of Legal Specialization

CONTRA COUNTY BAR ASSOCIATION CONTRA COSTA LAWYER Comprehensive Bankruptcy Assistance David COSTA A. Arietta

20 years of experience

700 Ygnacio Valley Road

for Individuals and Businesses Rated AV Preeminent Martindale-Hubbell