16.2.1 LTC Coverages
There are three basic levels of long-term care.
- Institutional Care
- Home-based Care
- Community Care
Working within these basic levels of care are skilled and intermediate nursing care, custodial care, home health care, adult day care, respite care, and continuing care.
Skilled Nursing Care
Skilled nursing care is 24 hours a day, seven days a week (24/7) for nursing and rehabilitative care and is the most expensive care that can be given. This type of care is only available by prescription issued through a doctor's orders and is usually administered in nursing homes.
Intermediate Nursing Care
Intermediate care is provided by registered nurses or skilled medical practitioners on a daily basis. A licensed practical nurse or a physical therapist can administer intermediate care with the supervision of a physician. It is less specialized than skilled nursing care and often involves more personal care.
Custodial Care
Custodial care is intended to assist with the activities of daily living (ADLs), which includes bathing, eating, dressing, and other routine activities. Special training or medical skills is not required to supply these services and is usually provided by unskilled nursing assistants in nursing homes, day care centers, and at home. It is often called personal care.
Home Health Care
Home health care is provided to patients while they are still in their own home and are generally able to function for themselves in most areas. A qualified, but not necessarily medical, person helps in performing the essential activities of daily living such as meals, shopping, and/or physical therapy on a part-time basis. Under home care provisions, the benefit period is usually more limited than for nursing home stays and benefit periods of one to two years are typically available.
Adult Day Care
Adult day care usually caters to those who are mentally or physically impaired, or when primary caregivers are not accessible. The center or facility's primary focus is custodial care, providing participants with transportation to and from the facility where they can join in social activities, group exercises, therapeutic activities, nutritional education, medical care, meals, speech and occupational and physical therapy.
Respite Care
Being a caregiver can certainly take its toll. Respite care is designed to give the primary caregiver a short rest period while still providing the patient with assistance in various ADLs.
Continuing Care
Continuing care is designed for seniors while living in an ongoing or lifelong care retirement community and provides assistance with full time medical and social needs. Personal, intermediate, and skilled nursing care is provided while still allowing senior citizens a way of living a more independent lifestyle. Retirement communities are often sponsored by religious or nonprofit organizations.
Taxation of LTC Benefits
Amounts received under an LTC contract are excluded from income because they are considered amounts received for personal injuries and sickness. The limit on these amounts are adjusted annually for inflation.
State Partnership Programs for Long-Term Care
Under a partnership plan, insureds obtain a form of long-term partnership with insurers who will give them a certain amount of long-term care insurance protection. If they collect maximum benefits under this coverage, they qualify for Medicaid and will be permitted to retain assets equal to the amount of insurance benefits they received. The Medicaid applicant must meet the income requirements for the state. These partnerships allow state governments and insurers to work together in an effort to save tax dollars and promote independence from government control by using insurance money to pay nursing home bills.
In general, these partnerships have four objectives:
- Stimulate the availability of high-quality, private, long-term care insurance
- Remove the fear of impoverishment resulting from a need for health care services
- Contain the growth of public expenditures
- Improve the understanding of the financing of long-term care through state counseling services
Although these programs were designed for people in the lower- to middle-income range, the majority of policyholders have significant assets to protect. Most participants have assets in excess of $350,000. Florida and 32 other states have enacted legislation to implement partnership programs.
The primary plan design allows the owner of a partnership plan to receive insurance benefits before applying for Medicaid. Under the plan, the insurer reimburses the insured for services that would have been covered by Medicaid if the insured had been an eligible Medicaid recipient. Those services include nursing home care, home health care, adult day care services, respite care, and supportive home care. The amount of benefits paid by the insurer are excluded from the applicant's total assets when applying for Medicaid. In other words, the state Medicaid program does not have to count this amount as part of the applicant's assets. The applicant still must have income levels below the state's Medicaid limits. Once qualified for Medicaid, persons receiving these types of services must contribute their income toward their care in the same way as required for other Medicaid recipients.
A second model of asset protection allows participants to keep all of their assets after receiving insurance benefits for three years of nursing home care, six years of home health care, or a combination of the two (in which two days of home care equal one day of nursing home care).
Group LTC
More and more employers have started to offer group LTC plans or voluntary (employee-paid) LTC plans as a part of the employment benefits package. The types of coverages and eligibility benefits are similar to those stated throughout this lesson. There are advantages to group LTC, including the "absence of individual underwriting and a structure that allows benefits to be applied to more than one family member (spouse or children)." Any contribution that the employer makes is beneficial, of course, but most of the plans are voluntary, which means they're entirely paid by employees. One way that a group LTC differs from most other group products is that the premiums may be equal to or higher than comparable individual plans.
