Some other important features of a good long-term care insurance plan include:
Early eligibility. It is important to look at when a policy holder becomes eligible for long-term care insurance benefits. You must find out what the “benefit triggers?” are. Most long-term care insurance policies kick in when a person cannot handle two or more “activities of daily living” or ADL’s. These include bathing, dressing, eating, getting from a bed to a chair, toileting and being incontinent of bowel and bladder. A good policy should also cover issues related to memory or cognitive impairment such as different forms of dementia, that will necessitate some level of supervision. Some will cover care which is deemed “medically necessary” such as when an individual with congestive heart failure may require home care.
A reasonable deductible period. Most long-term care plans have a waiting period (called a “deductible” or “elimination”period), which means that the policy does not really go into effect until a person has paid for care themselves, for a certain number of days. The longer the waiting period, the cheaper the long-term care policy.
A waiting period of less than 20 days will usually make a policy much more expensive. On the other hand, waiting periods of more than a hundred days, greatly reduce the chance that an individual will ever put the policy to use. A reasonable amount of days to wait is usually between 30 and 40 days.
Adequate reimbursement. Most long-term care policies pay a fixed amount for each day of long-term care, and then you pay the remainder. The benefits usually run in a range of between $50 and $300 a day. Of course, the higher the amount of the benefit per day, the higher the cost for premiums.
Home health care is usually covered at a rate of about 50% – 60% of the rate that it will cost your loved one to be in a nursing home or assisted-living facility. So in effect, a policy that pays $100 a day for nursing home care will usually pay about $50 a day for home health care.
In order to determine how much long-term care coverage your parent needs, figure out how much they can afford to spend on long term care (or is willing to pay). Now find out the average cost per day of nursing homes in your area. If a nursing home costs $160 a day and your loved one has an average of $70 of daily discretionary income, then they need a policy that offers at least $90 a day in coverage. Also, you need to keep in mind that nursing home rates will continue to climb, while your parent or love one’s income may not. Finally, it’s always important to remember that the rates paid for nursing home care do not include some expenses, such as drugs and supplies and the cost for additional services such as professional mental health and medical services.
Some information Adapted from How to Care for Aging Parents by Virginia Morris
Additional information and web page by Paul Susic Ph.D. Licensed Psychologist Clinical Director- Senior Care Psychological Consulting