Long-Term Care Insurance For California Residents (California) - The David Fluker Health Insurance Agency - Gilroy, California

Long-Term Care Insurance protects your assets in the event that you become ill and need the services of a caregiver, nursing home, convalescent home, alternative care facility or home health care.

How Long-Term Care Insurance Works
Long-Term Care Insurance is a lot like health insurance and disability insurance combined. It helps pay for the costs of healthcare while you are unable to care for yourself.
You select a daily benefit amount. This amount can range from as low as $50 per day up to $250 per day or more. The daily benefit amount that you choose is usually based on the prevailing costs of daily nursing home care in your area.

You also select the total benefit period, in years, that you want to cover. Most plans allow you to choose benefit periods of 1, 2, 3, 4, 5,6 and Unlimited years. Also, you select an "elimination period" which can be 0, 30, 60,90 or 180 days. This elimination period is the waiting period from the benefit "trigger" date to the day when benefits will begin to be paid.

The cost of the premium for your long-term care policy is based in large part on the daily benefit amount, benefit period, your age, and the elimination period that you select.
You may also choose a daily benefit "increasing" feature.

Long-term care insurance plans generally offer 3 choices for increasing the daily benefit amount in order to keep up with inflation and increasing costs of healthcare delivery:
No increase Option (daily benefit remains level)
5% Simple Interest Calculated Annual Increase
5% Compound Interest Calculated Annual Increase
If you choose no increase, your daily benefit amount will remain the same as long as the policy is in force. If you choose the 5% simple interest option, then your daily benefit will increase every year by a simple interest amount of 5%. If you choose the 5% compound interest option, then your daily benefit will increase every year by a compound interest amount of 5%.

Here is an example:

YEAR          No Increase          5% Simple          5% Compound
1                 $150.00                  $150.00              $150.00
2                 $150.00                  $155.00              $157.50
3                 $150.00                  $160.00              $165.38
4                 $150.00                  $165.00              $173.64
5                 $150.00                  $170.00              $182.33
6                 $150.00                  $175.00              $191.44
7                 $150.00                  $180.00              $201.01
8                 $150.00                  $185.00              $211.07
9                 $150.00                  $190.00              $221.62
10               $150.00                  $195.00              $232.70

In order to receive the benefits from your long-term care policy, you must meet the criteria that "triggers" the payment of benefits. Generally, these "triggers" are known as ADLs or Activities of Daily Living. There are 6 ADLs (7 in non tax-qualified plans) which include:

*Bathing
*Continence
*Dressing
*Eating
*Toileting
*Transferring

Your inability to perform any 2 of these ADLs will "trigger" the benefit on the date that the inability is diagnosed. This begins your selected elimination period and, once the elimination period is over, benefits are paid. Most plans do not require you to pay premiums at such time as you are receiving benefits from your plan. This is known as a "waiver of premium".

In addition to the ADL "trigger", certain conditions will automatically trigger benefits. Severe Cognitive Impairments and conditions such as Alzheimer's Disease will act as triggers regardless of your ability or inability to perform the ADLs.

Benefits from your long-term care insurance plan will continue for as long as your selected benefit period or until such time as you are able to perform 5 or all 6 or the ADLs again.

While most long-term care policies have similar benefits, it is important to understand the more subtle differences and the effects of those differences on your benefits. Questions you might ask:

*Does this policy pay the same daily benefit amount for home health care as it does for care given in a nursing home?

*Does this policy offer a non-forfeiture benefit and, if so, how much does it add to the cost?

*Is my daily benefit paid as a reimbursement of actual costs or do I receive a fixed-dollar amount (indemnity) based on my selected daily benefit amount?

*Does this policy offer a restoration of benefits in the event that I have a long period between claims?

*Does this policy offer unintentional lapse protection benefits?

California Partnership Programs
California is one of four states currently providing long-term care insurance under a partnership arrangement.
Partnership plans are the same as non-partnership plans in terms of benefits and plan design. The advantage to partnership is for those who cannot afford to purchase long-term care insurance on a very long or unlimited benefit basis.
California Partnership provides some special benefits for those who enroll.

Every dollar in benefit you receive from your long-term care policy offsets one dollar of countable assets used in Medi-Cal (Medicaid in other states) calculations. This means that if your total benefits received is $100,000, you can exempt an equal $100,000 from your countable assets when and if you go onto Medi-Cal.

You may remain in the same care facility as you were in under your long-term care plan when you go onto Medic-Cal. You would not be required to relocate to an available Medicaid facility.