What is long-term care?
Long-term care is the kind of help you need if you are unable to care for yourself because of prolonged illness or disability. It can range from help with daily activities at home, such as bathing and dressing, to skilled nursing care in a nursing home.
What does long-term care insurance cover?
Long-term care insurance helps pay for a variety of supportive services that assist people with health or personal care that might result from a chronic disease, serious accident, sudden illness, or cognitive impairment such as Alzheimer’s disease. Long-term care services are different from traditional medical care because their focus is not necessarily to improve the medical condition of an individual, but to maintain the individual’s quality of life.
Long-term care services may be provided by a health care professional such as a nurse, a home health aide, or other personal care provider. Varying amounts and levels of care can take place in a variety of locations. This can range from a few hours of care per week in one’s home to around-the-clock care in a nursing facility.
Medicare and other types of health insurance generally do not cover long-term care. Long-term care insurance policies vary greatly in the amount and scope of services they cover and the settings in which services are delivered.
What is not covered?
All policies contain limitations and exclusions. Some exclude coverage for pre-existing conditions for a period of six months. Many policies will not cover long-term care provided by family members.
What are long-term care services?
There are many different services that fall under long-term care, such as institutional care like nursing facilities or non-institutional care such as home health care. Click here to learn more about the services associated with long-term care.
What do long-term care services cost?
In 2011 in Missouri, the annual average cost of a semi-private room in a nursing home was nearly $51,000. The cost of staying in an assisted living facility was near $3,500 per month. The average hourly rate for a home health aide is nearly $19, while the average hourly rate of a homemaker is nearly $18. The average daily rate of an adult day care is $70. These costs are expected to increase for the foreseeable future.
How long can I collect benefits?
Long-term care policies generally limit benefits to a maximum dollar amount or a maximum number of days. They also may have separate benefit limits for nursing home care and home health care within the same policy. For example, a policy may cover five years of nursing home care and two years of home health care.
How much will an insurance plan pay?
You select a daily benefit amount, such as $100 per day which would be the maximum daily amount the policy will pay for care. If the care costs more, the individual must pay the difference. Most plans let an individual choose from a range of daily benefits. In addition, an individual may choose a benefit period that is a specific number of days, months or years.
When will benefits be available under a plan?
Long-term care insurance plans have an elimination period, which is the number of days that an individual must need nursing or home health care before a plan will pay for services. Shorter elimination periods have higher premiums. In addition, a plan will not pay benefits until certain requirements are satisfied. Those requirements are cognitive impairment or the inability to perform a minimum number of activities of daily living, such as bathing, continence, dressing, eating and transferring.
What is Medicaid?
Medicaid is a health insurance program jointly administered and funded by the federal and state governments. It provides health care services for eligible low-income individuals. The Department of Social Services, Family Support Division and MoHealthNet administer the Missouri Medicaid program.
Will Medicare cover long-term care costs?
No. Medicare, the federal health insurance program for disabled adults and adults age 65 and older, may provide temporary benefits for nursing home stays, but not for an extended time.
What other options are available to finance long-term care?
- A private health insurance or retirement health plan.
- An individual's own income, savings or sale of other assets.
- Relying on children or relatives to provide care on an informal basis.
- Medicaid, a public medical assistance program for people with low-income and limited financial resources.
What is a long-term care partnership policy?
A partnership policy makes it easier to qualify for Medicaid if you have exhausted the benefits of your long-term care insurance policy. Click here to find out more about partnership policies.
Who should buy long-term care insurance?
At least 70 percent of people 65 or older will require some long-term care services. However, long-term care insurance isn't for everyone, although everyone should plan for his or her potential future long-term care needs. If you are on a limited income or expect to have little to no retirement savings, long-term care insurance may not be right for you. Some people purchase long-term care insurance to protect assets and to have more choices about where and how they get their services.
What should I keep in mind when considering a long-term care insurance policy?
- Long-term care insurance isn't for everyone. If you are currently receiving Social Security or expect to have minimal or no retirement savings, you will likely qualify for state aid and won't need long-term care insurance.
- Research individual insurance companies to see whether they have a history of raising rates for long-term care coverage. Ideally, a company will set your initial rates at a level that makes future rate increases unnecessary.
- Check with your financial advisor or accountant for guidance on whether long-term care insurance is appropriate for your specific financial situation. If long-term care insurance is for you, shop around for the most appropriate coverage at the best price.
- Make sure you understand what a long-term care insurance policy covers and just as importantly, what it doesn't. Ask questions and make sure the company is reputable and licensed to sell insurance in Missouri by calling the department's Insurance Consumer Hotline at 800-726-7390 or emailing us.
- Pre-existing medical conditions may be excluded from coverage. In addition, for some policies, age 60 is a trigger for a rate increase. Thus, it may be beneficial to purchase your policy before your late 50's.
- Don't rely on Medicare or Medicaid to cover your long-term care needs. Medicare pays limited nursing home expenses. Medicaid pays for long-term care but only if you meet federal poverty guidelines, and the choice of care facilities can be very limited.
- Tax breaks are available for qualified long-term care insurance policy premiums. The benefit payments received under such policies are tax-free.
- Do not divulge personal financial or medical information over the phone, such as your Social Security number, your health status, your Medicare status or your private insurance coverage. Don’t be fooled by mailings about long-term care insurance that appear to be from an official government source. To report a scam, contact us.
- Be wary of advertising that suggests Medicare is associated with a long-term care policy. Medicare does not sell long-term care insurance or endorse companies.
What should be included in my policy?
- An "outline of coverage" that clearly describes the policy's benefits, terms and limitations in detail. Understand how much money the policy would pay, and how much you will be responsible for out of pocket.
- A clear description of the elimination period. Some policies have benefits that don't kick in until you've spent a certain amount of time in a nursing home.
- At least one year of coverage for nursing home or home healthcare expenses or both, including intermediate and custodial care.
- The right to cancel the policy for any reason within 30 days of purchase with a full premium refund.
- A guarantee that the policy can't be canceled or terminated because of the policyholder’s age or physical or mental health condition.
- Consider an inflation protection option that periodically increases the benefit level without the need for the policyholder to provide evidence of insurability.
Questions to ask your agent about long-term care insurance?
- Is the agent licensed to sell insurance in Missouri?
- When did your company last raise rates for long-term care insurance policies?
- How long has the company been selling long-term care insurance?
- What nursing homes, residential care facilities and home care providers are covered under the policy?
- May I hire anyone I choose to provide personal care or homemaker services under the policy?
If I buy a long-term care insurance policy, can the company increase the policy's premium before I need it?
There have been a number of measures taken to discourage long-term care insurance companies from under-pricing long-term care insurance policies. Companies must now disclose to prospective buyers their history of premium increases. You need to decide what product options best suit your needs. The cheapest policy is not necessarily the best policy.
Why plan now?
As Americans are living longer, long-term care services and expenses will be a major issue for many of us. Long-term care insurance is cheaper when you buy younger, and you'll likely have inflation protection. For example, a 65-year-old who's had a long-term care policy for 15 years will likely pay a lower rate than a 65-year-old who buys a policy today.
Key areas to consider when planning for your future:
- Communicate with family, friends and a trusted financial advisory
- Compare and understand long-term care insurance options
- Decide who you can count on for help
- Establish clear legal directions
- Learn what your community has to offer
- Make necessary home improvements
- Take control of your health and personal needs
- Refer to the links and resources page on this site
How can I find out if the company I'm considering for my long-term care insurance is reputable?
The Missouri Department of Insurance keeps a record of each insurance company’s consumer complaint history, known as a complaint index. The higher a company’s complaint index, the more cautious you should be. You can view our Complaint Index Report here. If you have any questions, call the Insurance Consumer Hotline, 800-726-7390.
Back to the long-term care insurance page