When you first noticed that your parent’s age was limiting them, what questions came to mind? Did you struggle to accept the reality of their aging or worry about their wellbeing? Did you wonder what preparations were in place for their needs?
Besides the questions you may have asked yourself, there is one question you must ask your aging parent: “Do you have a long-term care insurance policy?”
After a health crisis, anyone may find they need long-term care. But since senior citizens especially are at a higher risk for debilitating health problems, they are more likely to need it.
Long-term care provides assistance with activities of daily living, or ADLs. These include bathing, dressing, meal preparation, medication reminders, housekeeping, shopping, toileting and other non-medical assistance. In the future, forecasts say that 70% of people over the age of 65 will need long-term care at some point in their lifetime. According to the American Association for Long-Term Care Insurance, 30%, or 1.5 million people of the older population already have substantial long-term care needs.
The cost of long-term care is rising. Imagine what you believe your parent would pay for a room in a nursing home. In a 2015 survey, Genworth reported that a private nursing home room, which is the priciest option for care, now costs $92,378 annually. This is a 19% increase since 2011.
How should your elderly parent pay for the monumental cost of long-term care? If you are fortunate, your parent may already have the answer to that question. He or she might have a long-term care insurance policy. Long-term care insurance (LTCI) is a valuable tool to protect assets and finance long-term care. If your loved one has purchased a policy, you may be reading this article to find out how to navigate it with them. If they do not have a policy yet, this article will help you navigate LTCI for your parent nevertheless.
Long-term care insurance is an investment to consider before it is needed. Without LTCI, long-term care’s costly expenses are paid using either Medicaid (if you qualify for it) or out-of-pocket savings (if you can afford it). The middle class is in limbo between having too much wealth to qualify for Medicaid and too little to afford long-term care on their own. Long-term care insurance is meant to be a solution for them.
If your parent is in good health, between the ages of 50 and 65, and able to make decisions about paying for long-term care before they actually need it, it is time to shop for an LTCI policy. Some children of adults this age may be too young to take the lead in their parent’s financial matters. Yet at this time, your parent is in good shape to secure their policy because insurers will base costs on:
- Type of benefits desired
- Family History
If your parent is in poor health, around or above the age of 65 and in need of long-term care, their situation can fork into two directions.
If your parent does not have long-term care insurance, they may deplete their personal savings or depend on family to pay for or provide care. For seniors who have exhausted these options whose needs still aren’t met, they may have to resort to Medicaid; a health insurance option for low-income seniors.
If your parent has a long-term care insurance policy, funding for care is within reach. Your parent may not remember that they have LTCI. So ask them the crucial question, “Do you have a long-term care insurance policy?” This is an important starting point for the process ahead.
The Health Crisis
The unfortunate turn of events that typically prompts people to need long-term care is a health crisis. A health crisis can occur at any age and to a person in any state of health. Accidents and terminal illnesses are just a few health crises that handicap healthy people for the rest of their lives. Senior citizens are at risk for these crises in addition to common debilitating ailments, such as cognitive decline, cardiovascular disease, respiratory disease, falls, influenza, pneumonia and Alzheimer’s disease.
In the midst of fretting over the health status of your parent while they are treated in the hospital for these common health problems, it may be impossible for you to even consider thinking about what lies ahead after discharge. But following successful treatment of a serious health problem, senior citizens undergo dramatic changes in their lifestyles when they go home. They may have a sudden need for constant, dependable care. To continue the progress of your parent’s health, there must be a way to pay for it.
Families hope to feel relief after their elderly loved one’s discharge from a hospital. However, if they suddenly find themselves short of the resources to provide care for the senior’s needs at home, stress compounds on top of the health crisis. If your parent has an LTCI policy, this is where it brings you a solution.
After the health crisis, a senior with an LTCI policy can only activate their policy as soon as they qualify for care. Observe your parent to determine whether they are:
- Cognitively impaired
- Unable to bathe, dress or eat
- Unable to move on their own
- Unable to toilet independently
These are just a few signs for your parent to activate their LTCI policy, with your help.
Activating the Policy
There are several things for you and your parent to know when activating their LTCI policy. Know how long the elimination period is for the policy. The elimination period is essentially a time-based deductible where you are responsible for paying the full portion until coverage begins. Elimination periods can range from 0-100 days. If you were preoccupied with your parent’s health treatment, this detail may have escaped you. It is frustrating to suddenly need immediate long-term care after a health crisis, only to find that you have to wait for your LTCI policy to kick in its coverage. Knowing the elimination period ahead of time not only informs your parent of what policies to choose in the first place, it also cues you to prepare out-of-pocket resources for care during its time span.
Know the policy’s maximum daily benefit and maximum lifetime benefit. The maximum daily benefit is the amount a policy will reimburse for each day of long-term care. Look out for inflation riders on the maximum daily benefit, which can significantly increase it over time.
The maximum lifetime benefit is the total amount of time or money up to which benefits will be paid. Policies can state the maximum lifetime benefit in either days or dollars. Know which one your parent’s plan uses. Also look out for a Restoration of Benefit, which allows your parent to restore benefits if they are not fully maximized.
Although your parent has already chosen what benefits to receive if they’ve already purchased a long-term care insurance policy, it helps you to know what specific benefits their plan covers. The Genworth 2015 Cost of Care Survey outlines all types of long-term care that seniors can get, as well as their costs. Research the types of care covered by your parent’s plan and be assertive in commissioning the best companies to provide them. If your parent is like most American senior citizens today, they may prefer long-term care at home. Securing this care entails knowing the coverage the LTCI policy will afford, what services to go to for the care and monitoring the professionals who come to your parent’s aid.
Knowing all of this, you are ready to initiate the activation of your parent’s LTCI policy. These are things for you to do:
- Call your parent’s insurer and request a claim packet.
- Fill out the claim form and send it in.
- Make sure to list the information of the company providing care and their tax ID.
- Check to see if the policy requires a doctor to fill out a form documenting your need for care.
- Check to see if your parent needs an assessment from a registered nurse (RN).
Once the claim is approved, you want your parent’s benefits to be maximized under the reimbursement they receive. Achieving this takes constant attention to detail and monitoring invoices and notes your insurer needs to keep the claim active. Ensure that each invoice you receive from providers, like caregiver agencies, is submitted to the insurer. Each invoice must have notes documenting that assistance with your parent’s ADLs is provided each day.
Aside from all the work that goes into purchasing and activating it, long-term care insurance is sometimes disappointing when the grant of coverage is unpredictable. What if your parent never qualifies? What if the claim is not approved? What if it is, but the insurer decides your parent no longer qualifies later on and cancels it?
Your Trusted LTCI Partner
You and the rest of the children who try to navigate long-term care insurance for their aging parents are not alone. Amada Senior Care is the one-stop shop for long-term care insurance advocacy. Amada Senior Care locations across the U.S. provide a Concierge LTC Resource Center of experts who help policyholders understand and verify their long-term care insurance benefits. Our senior care advisors will guide you through the process of reviewing and filing a claim so that you can start receiving your benefits as soon as possible. Our advocates will:
- Identify and analyze the requirements of your policy, including elimination periods, daily maximum, lifetime benefits and coverage.
- Assist policyholders in completing the necessary forms to file a claim.
- Bill the LTCI carrier directly at policyholder’s request.
- Aid in the responsibilities of payroll taxes, benefits, scheduling, bonding, workers’ compensation and general and professional liability insurance.
Amada Senior Care has established relationships with multiple LTCI carriers and third-party administrators to make the claims process easier. The Concierge LTC Resource Center will not only assist you or your loved one with the details of your policy but will also coordinate and deliver care – providing you with the peace of mind and the time to share happy, healthy wellbeing with your elderly parent.
“Navigating Long-Term Care Insurance for Your Parent,” by Michelle Mendoza, Amada contributor.