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NOVEMBER IS LONG TERM CARE INSURANCE
AWARENESS MONTH...
Long-term care needs can be funded through a variety of sources. Medicaid pays for long-term
care when you meet certain financial requirements. Some consumers choose to borrow money on
their homes, either through using a home’s equity or a reverse mortgage. Some are financially
able to fund care through savings, pension or other accounts. Others opt to purchase insurance
to fund the cost of a nursing home or other facility. Long-Term Care Insurance Partnership
Program.
The Kentucky Long-Term Care Insurance Partnership Program is an agreement between
state government and private insurance companies to assist consumers in planning for their long-
term care (LTC) needs. The program was designed to increase awareness of issues related to
long-term care, to create ways to reduce Medicaid costs for nursing home care, and to provide an
incentive to consumers to purchase certain insurance policies in order to protect assets from
Medicaid spend down requirements.
Eligibility for Medicaid can be very complicated and is reviewed on a case-by-case basis. However,
if you purchase a LTC partnership policy and later apply and are declared eligible for Medicaid
benefits, you can keep assets equal to the amount of benefits you have received through the
insurance coverage. In addition, these assets would not be subject to estate recovery after your
death, allowing you to leave a portion of your assets to your heirs. Generally, an unmarried person
would not qualify for Medicaid until he/she has assets of $2,000 or less. For example, if you have
$100,000 in assets (stocks, bank accounts, etc.), Medicaid would require you to spend down
$98,000 in assets before you would be eligible for benefits. However, if you have a long-term care
partnership policy that has paid out $50,000 in benefits, Medicaid would disregard $50,000 and
you would be required to spend down $48,000 in assets before you would be eligible. Keep in
mind that asset protection (also known as asset disregard) is based on the amount the insurance
company pays in benefits, not the value of the policy or the amount of premiums you have paid.
Kentucky has entered into a reciprocal agreement with most states offering partnership
programs. If you buy a partnership policy in Kentucky and later move to a state with a
partnership program and an agreement with the commonwealth, you may receive the
same dollar-for-dollar asset protection benefit from that state’s Medicaid program.
However, not all states participate in a reciprocal agreement so it is important to check
before you move.
Why buy long term care insurance?
1. It will help you keep your independence and dignity and allow you to make choices. When the
time comes for paying for your long term care needs, you may end up spending your savings and
then relying on Medicaid for assistance. Medicaid typically pays for a semi-private room in a
nursing home, but not all nursing homes take Medicaid. In many states it is not easy to get
Medicaid to cover home care or pay for assisted living. Many people want to stay at home, but with
Medicaid may not be able to. Insurance allows you to have a choice of where you want to live.
2. If you are married and you have a need for long term care, your spouse may be forced to pay
for an outside caregiver. The cost is likely to come from your combined income and assets. This
may leave your spouse with minimal funds in the future. Insurance solves this problem and allows
the healthy spouse to keep the assets.
3. Many healthy caregiving spouses won't spend their money and choose to "tough it out" on their
own without help. If care of a disabled spouse drags on too long, this can have a devastating
effect on the physical and emotion health of the caregiver. Insurance will pay for professional care
for the disabled spouse and allow the caregiver spouse needed rest.
4. If your children promise to take care of you when the time comes that you need care, insurance
will help them do that. Probably neither you nor your children have thought of the prospects of
moving you from place to place, changing your dirty diapers, cleaning up after "accidents" in the
bathroom or helping you with bathing and dressing. Insurance will pay for aides to help your
children with these tasks.
5. If you are single and a need for long term care arises, insurance can pay for and coordinate
that care. With insurance you won't have to feel you would be a burden for family or friends.
6. If you have the desire to leave assets behind when you die, insurance will help preserve those
assets from the cost of long term care.
How to buy long term care insurance: There are dozens of long term care insurance
companies selling hundreds of different types of policies. It can become very confusing. There are
various benefit options for home care and nursing home care, waiting periods, qualifying periods,
inflation riders, and the list goes on. Our long term care insurance specialists who understands the
policy provisions and the coverage needed and can help you determine the best policy for what
you want.
The CLASS Act Stays in the Picture...The Community Living Assistance
Services and Supports (CLASS) Act, which would establish a new national long-term care
insurance program, continues to survive the long legislative march towards health reform. The
measure is part of the 1,990-page House health care reform bill, H.R. 3962, that passed the
House. And, given the CLASS Act's short-term contribution to revenue, the betting on Capitol Hill is
that the Act will be in any health reform bill that makes it to President Obama's desk. However,
some details of the Act as outlined in the House bill have changed from what its original sponsor,
the late Sen. Edward M. Kennedy, originally envisioned.
Under the voluntary program, Americans would pay a premium, originally estimated at $65 per
month. After they had contributed for at least five years, participants who needed long-term care
would be eligible for a modest benefit to pay for a range of services that would help them stay in
their homes. In the House bill, that benefit would depend on the degree of incapacity, but would
average $50 a day.
Although versions of the CLASS Act are in the House bill and in the Senate Health, Education,
Labor and Pensions (HELP) committee's health care reform bill, it is unclear whether the Act will be
part of the final Senate bill, which will be a melding of the HELP and Finance committees' health
reform measures. But the CLASS Act has one huge advantage that could ensure its survival: it
helps the bottom line of any final legislation by being a revenue generator for about two decades.
In its preliminary analysis of the House bill, the Congressional Budget Office projected that
because the CLASS Act would pay out far less in benefits than it would receive in premiums over
the 10-year budget window, it would reduce deficits by about $72 billion, and by a smaller amount
in the following decade. After 2029, however, the program would start contributing to the federal
deficit, but by a small amount compared to other provisions of the bill.
House Version Changes Details: As currently structured in the House bill, the program would
offer between two and six different benefit levels, depending on level of disability. Rather than
benefits of either $50 or $100 per day, as called for in earlier versions of the bill, the House
version states that the benefit amount will be an average of $50 per day. There could be a sliding
scale of benefits, ranging from, say, $30 a day for inability to perform two activities of daily living
(ADLs) to $70 a day for five or six ADLs. Also under the House version, beneficiaries could drop
out of the program only during a circumscribed "disenrollment period."
In addition, a work requirement has been removed from the House version, which should result in
more older Americans signing up. Although enrollees still have to be working when they first enroll,
Sen. Kennedy's version required that they had to work three of the first five years that they paid
premiums. Under the House version, workers can quit a job after they sign up and still be in the
program. Finally, the House version would take effect in late 2012 or early 2013.
Insurance Industry Opposition and Support: As ElderLawAnswers previously reported, the
insurance industry is fighting to remove the CLASS Act from health reform legislation, arguing that
its modest benefit will not adequately protect Americans who need nursing home care or 24-hour
home health care services. A survey by the American Council of Life Insurers, which is
spearheading the opposition to the Act, found that public support for the CLASS Act drops when
respondents learn about its potential cost. The survey found that only 3 percent of respondents
would participate in the program if premiums reached $160 monthly, which is the level the
American Academy of Actuaries-Society of Actuaries claims is required for the program to remain
solvent.
But a former opponent of the CLASS Act, Scott A. Olson, CLTC, a long-term care insurance agent
based in Redlands, California, says he has since been persuaded that the Act will be a net boon
to his industry.
"Everyone who will sign up for the CLASS Act is essentially saying 'Yes' to long term care
insurance (albeit, government-run long term care insurance)," said Olson in an e-mail message.
"But, just as tens of millions of Americans buy Medsupps, so, too, will millions buy 'Class Act'
supps!" Olson also contends that the CLASS Act will send a strong message to the older
population that "Healthcare reform does NOT include free long-term care."
AWARENESS MONTH...
Long-term care needs can be funded through a variety of sources. Medicaid pays for long-term
care when you meet certain financial requirements. Some consumers choose to borrow money on
their homes, either through using a home’s equity or a reverse mortgage. Some are financially
able to fund care through savings, pension or other accounts. Others opt to purchase insurance
to fund the cost of a nursing home or other facility. Long-Term Care Insurance Partnership
Program.
The Kentucky Long-Term Care Insurance Partnership Program is an agreement between
state government and private insurance companies to assist consumers in planning for their long-
term care (LTC) needs. The program was designed to increase awareness of issues related to
long-term care, to create ways to reduce Medicaid costs for nursing home care, and to provide an
incentive to consumers to purchase certain insurance policies in order to protect assets from
Medicaid spend down requirements.
Eligibility for Medicaid can be very complicated and is reviewed on a case-by-case basis. However,
if you purchase a LTC partnership policy and later apply and are declared eligible for Medicaid
benefits, you can keep assets equal to the amount of benefits you have received through the
insurance coverage. In addition, these assets would not be subject to estate recovery after your
death, allowing you to leave a portion of your assets to your heirs. Generally, an unmarried person
would not qualify for Medicaid until he/she has assets of $2,000 or less. For example, if you have
$100,000 in assets (stocks, bank accounts, etc.), Medicaid would require you to spend down
$98,000 in assets before you would be eligible for benefits. However, if you have a long-term care
partnership policy that has paid out $50,000 in benefits, Medicaid would disregard $50,000 and
you would be required to spend down $48,000 in assets before you would be eligible. Keep in
mind that asset protection (also known as asset disregard) is based on the amount the insurance
company pays in benefits, not the value of the policy or the amount of premiums you have paid.
Kentucky has entered into a reciprocal agreement with most states offering partnership
programs. If you buy a partnership policy in Kentucky and later move to a state with a
partnership program and an agreement with the commonwealth, you may receive the
same dollar-for-dollar asset protection benefit from that state’s Medicaid program.
However, not all states participate in a reciprocal agreement so it is important to check
before you move.
Why buy long term care insurance?
1. It will help you keep your independence and dignity and allow you to make choices. When the
time comes for paying for your long term care needs, you may end up spending your savings and
then relying on Medicaid for assistance. Medicaid typically pays for a semi-private room in a
nursing home, but not all nursing homes take Medicaid. In many states it is not easy to get
Medicaid to cover home care or pay for assisted living. Many people want to stay at home, but with
Medicaid may not be able to. Insurance allows you to have a choice of where you want to live.
2. If you are married and you have a need for long term care, your spouse may be forced to pay
for an outside caregiver. The cost is likely to come from your combined income and assets. This
may leave your spouse with minimal funds in the future. Insurance solves this problem and allows
the healthy spouse to keep the assets.
3. Many healthy caregiving spouses won't spend their money and choose to "tough it out" on their
own without help. If care of a disabled spouse drags on too long, this can have a devastating
effect on the physical and emotion health of the caregiver. Insurance will pay for professional care
for the disabled spouse and allow the caregiver spouse needed rest.
4. If your children promise to take care of you when the time comes that you need care, insurance
will help them do that. Probably neither you nor your children have thought of the prospects of
moving you from place to place, changing your dirty diapers, cleaning up after "accidents" in the
bathroom or helping you with bathing and dressing. Insurance will pay for aides to help your
children with these tasks.
5. If you are single and a need for long term care arises, insurance can pay for and coordinate
that care. With insurance you won't have to feel you would be a burden for family or friends.
6. If you have the desire to leave assets behind when you die, insurance will help preserve those
assets from the cost of long term care.
How to buy long term care insurance: There are dozens of long term care insurance
companies selling hundreds of different types of policies. It can become very confusing. There are
various benefit options for home care and nursing home care, waiting periods, qualifying periods,
inflation riders, and the list goes on. Our long term care insurance specialists who understands the
policy provisions and the coverage needed and can help you determine the best policy for what
you want.
The CLASS Act Stays in the Picture...The Community Living Assistance
Services and Supports (CLASS) Act, which would establish a new national long-term care
insurance program, continues to survive the long legislative march towards health reform. The
measure is part of the 1,990-page House health care reform bill, H.R. 3962, that passed the
House. And, given the CLASS Act's short-term contribution to revenue, the betting on Capitol Hill is
that the Act will be in any health reform bill that makes it to President Obama's desk. However,
some details of the Act as outlined in the House bill have changed from what its original sponsor,
the late Sen. Edward M. Kennedy, originally envisioned.
Under the voluntary program, Americans would pay a premium, originally estimated at $65 per
month. After they had contributed for at least five years, participants who needed long-term care
would be eligible for a modest benefit to pay for a range of services that would help them stay in
their homes. In the House bill, that benefit would depend on the degree of incapacity, but would
average $50 a day.
Although versions of the CLASS Act are in the House bill and in the Senate Health, Education,
Labor and Pensions (HELP) committee's health care reform bill, it is unclear whether the Act will be
part of the final Senate bill, which will be a melding of the HELP and Finance committees' health
reform measures. But the CLASS Act has one huge advantage that could ensure its survival: it
helps the bottom line of any final legislation by being a revenue generator for about two decades.
In its preliminary analysis of the House bill, the Congressional Budget Office projected that
because the CLASS Act would pay out far less in benefits than it would receive in premiums over
the 10-year budget window, it would reduce deficits by about $72 billion, and by a smaller amount
in the following decade. After 2029, however, the program would start contributing to the federal
deficit, but by a small amount compared to other provisions of the bill.
House Version Changes Details: As currently structured in the House bill, the program would
offer between two and six different benefit levels, depending on level of disability. Rather than
benefits of either $50 or $100 per day, as called for in earlier versions of the bill, the House
version states that the benefit amount will be an average of $50 per day. There could be a sliding
scale of benefits, ranging from, say, $30 a day for inability to perform two activities of daily living
(ADLs) to $70 a day for five or six ADLs. Also under the House version, beneficiaries could drop
out of the program only during a circumscribed "disenrollment period."
In addition, a work requirement has been removed from the House version, which should result in
more older Americans signing up. Although enrollees still have to be working when they first enroll,
Sen. Kennedy's version required that they had to work three of the first five years that they paid
premiums. Under the House version, workers can quit a job after they sign up and still be in the
program. Finally, the House version would take effect in late 2012 or early 2013.
Insurance Industry Opposition and Support: As ElderLawAnswers previously reported, the
insurance industry is fighting to remove the CLASS Act from health reform legislation, arguing that
its modest benefit will not adequately protect Americans who need nursing home care or 24-hour
home health care services. A survey by the American Council of Life Insurers, which is
spearheading the opposition to the Act, found that public support for the CLASS Act drops when
respondents learn about its potential cost. The survey found that only 3 percent of respondents
would participate in the program if premiums reached $160 monthly, which is the level the
American Academy of Actuaries-Society of Actuaries claims is required for the program to remain
solvent.
But a former opponent of the CLASS Act, Scott A. Olson, CLTC, a long-term care insurance agent
based in Redlands, California, says he has since been persuaded that the Act will be a net boon
to his industry.
"Everyone who will sign up for the CLASS Act is essentially saying 'Yes' to long term care
insurance (albeit, government-run long term care insurance)," said Olson in an e-mail message.
"But, just as tens of millions of Americans buy Medsupps, so, too, will millions buy 'Class Act'
supps!" Olson also contends that the CLASS Act will send a strong message to the older
population that "Healthcare reform does NOT include free long-term care."
NEWS