Long Term Care

What is Long Term Care?
Long term care is a term that encompasses a variety of services including medical and non-medical care to people who have a chronic illness or disability. Long-term care helps meet health or personal needs. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community (i.e. a day care, in assisted living or in nursing homes. It is important to remember that you may need long term care at any age.

Who should receive Long Term Care?
You may never need long term care. This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family and friends are the sole caregivers for 70 percent of the elderly. A study by the U.S. Department of Health and Human Services says that people who reach age 65 will likely have a 40 percent chance of entering a nursing home. About 10 percent of the people who enter a nursing home will stay there five years or more.

Individuals who have chronic or long term conditions that inhibit daily functioning may be candidates for long term care. Often candidacy for long term care will be determined using two categories of functional ability, the Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs). The ADLs include whether individuals need help with eating, dressing, bathing, toileting, and motor skills; the IADLs refer to skills like money management, shopping, medication monitoring, meal preparation, housework, and transportation. If individuals have problems with any of these, they may be candidates for long term care assistance.

How to pay for Long Term Care
Often, paying for long term care is one of the most significant associated concerns. Colorado Medicaid will pay for long term care under certain circumstances. The care must have occurred for 30 consecutive days before Medicaid will pay, and individuals under 65 will have to be approved as disabled. There may be different thresholds if individuals need only home care.

Generally Medicare does not cover long term care, except limited coverage of skilled nursing or home health care when medically necessary. After a minimum 3-day hospital stay, Medicare will fully pay for 20 days of care in a skilled nursing facility, and most coverage from days 21-100 (with a $161 per day co-pay in 2016). After 100 days, Medicare will no longer cover skilled nursing. Home care is also available through Medicare.

Long Term Care Insurance

Because Medicare pays for up to 100 days of skilled care in a nursing home, an insurance policy may be purchased to cover Long Term Care in the home or nursing facility for days that require custodial or non-skilled care.

Features of a Long Term Care Insurance Policy include:

  • Inflation protection
  • A thirty-day “free look” period
  • Third party notice to prevent unintentional premium lapse
  • An extension of benefits if policy lapses after confinement
  • Must be federally qualified for tax-deductibility per HIPAA law and regulation
  • Long Term Care Insurance Policies in Colorado may not:
    • Be cancelled because of age or mental or physical deterioration
    • Exclude coverage of a pre-existing condition for more than 6 months

Forms and rates must be pre-approved by the Colorado Division of Insurance.  Long-term care insurance may be expensive depending upon the individual’s age. Finances should be reviewed to determine if purchasing long term care insurance is appropriate. Long term care costs continue to escalate at an ever-increasing rate.  If it is likely the individual may qualify for Medicaid, long-term care insurance may not be necessary.

Agents that sell long term care insurance can be exclusive agents that work for only one company or they may be agents that are able to sell policies for multiple companies.  Sometimes agents that work for more than one company are better able to find a policy that meets an individual’s financial goals, as well as anticipated health care needs.  A list of companies that are authorized to sell products in Colorado follows at the end of this section.

 

Long Term Care Insurance Partnership Program

The program is designed to encourage individuals to plan ahead and provide for their long term care health needs.  The program allows an individual to retain resources in an amount equal to the insurance benefits paid under a qualified long term care partnership insurance policy that they would normally be required to spend on long term care.  If the individual needs assistance in paying for long term care and applies for Medicaid, resources protected under Medicaid eligibility and estate recovery are equivalent to the amount of long term care insurance benefits paid under a long term care insurance partnership policy.

An individual must still meet other eligibility criteria for financial and functional (medical) needs to qualify for Medicaid long term care.  Only resources are protected under this program.  Any pension, Social Security and other income must be used to help pay for long term care costs.  An individual does not have to exhaust their qualified long term care partnership insurance policy benefits prior to applying for Medicaid long term care services. For information visit Colorado’s Long Term Care Partnership page.

All Partnership policies must include inflation protection of 5% compounded annually or, in the alternative, consumer price indexed inflation protection compounded annually up to age 61.  From age 61 to 75, Colorado requires inflation protection of 5% simple interest, 3% compound interest, CPI or 5% compounded 2 times the maximum.  From age 76 on, no inflation is required but still may be purchased as part of the policy.  All Partnership policies must be issued after the program begins in Colorado. Per federal law, Colorado cannot grandfather policies.