Long-Term Care Insurance Coverage

By CalBroker Mag

As the demand for long-term care soars, so do anxieties about paying for these essential services. According to a 2023 KFF survey, 43% of respondents don’t feel confident that they’ll be able to afford care as they age. Additionally, only 28% of adults aged 50 to 64 have saved money for future living assistance expenses.1

Insurance coverage for long-term care alleviates these concerns by providing financial support for extended care services. This insurance can give policyholders peace of mind and safeguard their financial futures. By learning about the ins and outs of long-term care insurance, you’ll help your clients effectively plan for their future health needs.

What Is Insurance Coverage for Long-Term Care?

Long-term care insurance — also known as custodial care coverage — covers the costs of extended care services for people who need ongoing support. It pays for expenses not covered by Medicare or traditional insurance, such as assisted living and skilled nursing.2

This insurance offers coverage for people with chronic illnesses, disabilities, aging-related conditions, and other long-term health needs. For instance, a person with Alzheimer’s disease could use long-term care insurance to pay for specialized memory care services.

Insurance companies typically sell long-term care policies to young, healthy people to cover future medical expenses.

Eligibility criteria vary by insurer but may include:2

• Ability to climb stairs and walk several blocks

• Ability to perform activities of daily living (ADLs) independently

• Absence of AIDS, HIV, or arthrogryposis renal dysfunction cholestasis syndrome (ARC)

• Absence of symptoms related to Alzheimer’s disease, multiple sclerosis, muscular dystrophy, and other chronic health conditions

Policyholders must also meet specific criteria to begin using their long-term care benefits. Most insurers require a physician’s diagnosis for cognitive impairment. Policyholders can also receive benefits if their physician certifies that they need help with at least two ADLs for 90 days or longer.2

Services Covered by Long-Term Care Insurance

Long-term care insurance covers ongoing medical expenses for people with complex health needs that require extended and specialized support. Policy coverage typically includes these essential services:

In-Home Care

In-home care coverage allows policyholders to receive healthcare services from the comfort of their homes. These services are available for seniors, people with disabilities, patients recovering from surgery or illness, and others.

In-home care takes many forms, including:

• Companion care: A caretaker provides non-medical services and social support to help patients stay engaged and prevent loneliness. For instance, an aging patient may go on daily strolls with their caretaker and get help with grocery shopping.

• Help with ADLs: An in-home care professional can assist with bathing, caring for dental hygiene, and other daily activities.

• Nursing care: A licensed healthcare provider travels to the patient to deliver healthcare services. For instance, a person recovering from a knee replacement surgery may receive wound management and physical therapy.

In-home care allows older adults and others who need ongoing assistance to maintain their independence. Patients who receive these services can remain in their homes and communities instead of moving to an assisted living or skilled nursing facility.

Facility Care

Insurance coverage for long-term care also includes facility care. This type of care allows policyholders to receive healthcare services in residential settings.

Common types of facility care include:

• Assisted living: Residents live in independent units and receive help with ADLs. For instance, staff may provide housekeeping and remind residents to take their medications.

• Nursing home: These facilities provide comprehensive medical care and 24/7 supervision. Nursing homes are a great option for people with limited mobility, cognitive impairment, and other conditions that require around-the-clock support.

• Memory care: Memory units offer specialized support for people with Alzheimer’s disease, dementia, and other cognitive disorders. These facilities typically provide brain-stimulating activities and have security measures to keep residents safe.

Facility care allows residents to build social connections with peers, reducing loneliness. These communities also offer communal dining, recreational facilities, and other amenities that improve residents’ quality of life.

Activities of Daily Living

Many people require assistance with everyday activities due to age, disabilities, and illnesses. Long-term care insurance providers typically allow policyholders to receive benefits if they can’t perform two of these six ADLs:3

• Bathing

• Continence

• Dressing

• Eating

• Transferring in and out of a bed or chair

• Toileting

Long-term care insurance enables eligible policyholders to receive daily assistance with these tasks. For instance, a person with a spinal cord injury could have an in-home caretaker who helps them transfer from their bed to their wheelchair. Similarly, someone who experiences a stroke could move into an assisted living facility to receive assistance with bathing and toileting.

Assistance with ADLs improves patients’ quality of life and allows them to maintain their dignity. Coverage for these services also reduces the strain on family members and enables policyholders to receive professional support.

Filing Claims for Long-Term Care Insurance

People often assume they can use their long-term care insurance whenever they need it, but that’s not the case. Policyholders must follow their insurance company’s filing process to get reimbursed for claims.

First, policyholders should ask their physicians to verify that they need long-term care. This documentation should explain why they need these services and highlight any relevant diagnoses.

Additionally, long-term care insurance companies have a waiting or elimination period before coverage kicks in. Many insurers have a 90-day waiting period, but this window can range from zero days to up to six months. During this time, policyholders must cover all their long-term care expenses themselves.

After the waiting period, policyholders continue paying for their long-term care expenses out of pocket, but they can file claims with the insurance company for reimbursement. The insurer will assess the claims and decide whether to approve them based on its coverage policies.

Help Your Clients Plan Ahead

Long-term care services allow individuals to age with dignity and receive essential healthcare. However, these services can cost thousands of dollars a month, especially for people who need specialized care.

As healthcare costs continue to rise, insurance coverage for long-term care has become a wise investment for many people. This insurance can enable policyholders to receive necessary care without wiping out their savings or going into debt.

As a reliable advisor, you can help clients understand the benefits of long-term care insurance and make informed decisions about their current and future health.

Medicare does not provide long-term care coverage or custodial care unless medical care is needed. Learn more about what is covered under your plan.