In other articles, we looked at the government’s medical assistance program that’s available to pay for the cost of care at a nursing home. As we saw, that’s available only after you have spent almost all of your own money. In an effort to preserve some of their assets, many who are concerned‚ about cost of long-term care are turning toward private insurance policies. Due to some recent changes, shopping for such a policy should now be a little easier.
Since 1995, Pennsylvania has had guidelines that require all long-term health care policies to meet certain minimum standards. Even with these standards, however, coverages and premiums will still vary greatly from company to company. As such, it will still pay to shop around for the best policy for your needs. In this regard, you should focus on certain basic features before making a purchase. When selecting a long-term care policy, you should first look at the levels of care that are covered. Generally, nursing care is divided into three groups: skilled, intermediate and custodial care. You should make sure the policy covers all three levels. In addition, better policies also provide benefits for care in one’s residence as well as adult day care. Some policies even have benefits that can be used to adapt your home so you can avoid going to a nursing home.
After reviewing the types of care that are covered, you should focus on the so-called “gatekeepers”. These are the conditions that must be met before benefits will be paid. With the better policies, benefits are triggered if your doctor orders the care, or if you have some cognitive impairment, or if you are unable to perform a certain number of “activities of daily living” such as bathing, dressing, eating and toileting.
The next issue will be choosing the level of benefits. Most policies pay a fixed dollar amount per day. Since the cost of such care will steadily increase, it is probably best to look for a policy which provides benefits that increase with the inflation rate. For example, a policy that promises to pay $250 per day may only be paying a fraction of the costs of long-term expenses 10 years from now. Under the new regulations, any policy offering inflation protection must be certain minimum requirements.
You should also review both the elimination period and the benefit period. The elimination period is the number of days that you must pay for on your own before the policy benefits kick in. The period is generally between 0 to 365 days. The longer the period, the lower the premium. The benefit period on the other hand refers to the length of time for which benefits will be paid. This can range from one year to lifetime. In some policies, the benefits are subject to a lifetime maximum, while others have feature that restores benefits if you recover for a certain period of time. Finally, with some old policies, no benefits were paid if you needed care as a result of certain illnesses such as, Alzheimer’s disease. Under the new standards, you don’t have to look for such an exclusion as all long-term care policies must now provide coverage for Alzheimer’s.
Another plus under the new regulations is the so-called “third party notification” provision. This feature permits you to name someone, such as child, to receive a 30-day notice before the policy can be terminated. As such, the policy you select won’t be unintentionally terminated. Rather, it will still be in force when you need it most.