Your Long-Term CarePlanning KitInformation and tools tostart planning today.                                              ...
Table of Contents                    4    Understanding Long-Term Care                    6    Talking to Your Family abou...
Welcome!By requesting this kit, you’ve taken the first step towardpreparing for the years ahead.Planning for your long-ter...
Understanding Long-Term CareLong-term care refers to a variety of services     It isn’t just for the elderly.and supports ...
Your long-term care needs                             may change over time.                            Community-based ser...
Talking to Your Family about Long-Term CareFrom a practical standpoint, we all know         How will you pay for your long...
Who will take care of you?                       Start talking and planning.               1. Is staying at home for as lo...
How Much Will I Need forMy Long-Term Care Expenses?Of course, no one can predict the future,                        •  he ...
Paying for Long-Term Care Expenses:What are My Options?            Now that you have spent some time              Home equ...
Medicare, Medicaid, and Long-Term CareDespite what many people believe, very              for a couple. What’s considered ...
In essence, you will likely have to “spend                        For anyone who has worked and saved                     ...
Understanding Long-Term Care InsuranceLong-term care insurance can help take           Services not covered bythe worry ou...
How long-term care                                 When payments start                              insurance works       ...
Understanding Long-Term Care InsuranceHow long benefits will be paid                   Optional policy featuresIt’s most c...
Nonforfeiture benefit                           Restoration of benefits                              If you cancel your po...
Texas Long-Term Care Partnership-Qualified PoliciesTexas Long-Term                                 For example, assume you...
Inflation protection                             State-to-state coverage                              Over time, the price...
Worksheet: Determining if Long-Term Care Insurance May be Right for You.After answering these questions, you should have a...
Is Long-Term Care Insurance Right for Me?There are two costs to long-term care—        Long-term care insurance can go a l...
Creating Your ComprehensiveLong-Term Care PlanDetermining how you will pay for your              Get familiar with local ...
Look for other resources that may cover        Advance-care and  your long-term care expenses.                 legal plan...
Worksheet: Planning for Long-Term Care ExpensesNow that you have started thinking about your long-term care plan, it’s tim...
Step 3Here’s where you look at your estimated costs for long-term care compared to the totalresources you think may be ava...
Worksheet: Comparing Long-Term CareInsurance PoliciesIf you decide long-term care insurance is right for you, use this wor...
For More Information and AssistanceVisit www.OwnYourFutureTexas.orgAt the Texas Long-Term Care Partnershipwebsite, you’ll ...
The Texas Long-Term Care Partnership was created by the Texas Legislature to                give Texans like you the infor...
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Long Term Care


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Long-Term Care isn't just for the elderly, and it isn't just about nursing homes. It's about having the assistance you need during an extended illness or injury at any time of life. Please read this guide. As always we are here to help.

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Long Term Care

  1. 1. Your Long-Term CarePlanning KitInformation and tools tostart planning today. care t erm help ong- n ith l ge, I ca W ra cove ect my: prot ily Fam e Hom nces F ina ices Cho ind e of m Peac TEXAS LONG-TERM CARE PARTNERSHIP 1
  2. 2. Table of Contents 4 Understanding Long-Term Care 6 Talking to Your Family about Long-Term Care 8 How Much Will I Need for My Long-Term Care Expenses? • Worksheet: Estimating Your Long-Term Care Expenses 9 Paying for Long-Term Care Expenses: What are My Options? 10 Medicare, Medicaid, and Long-Term Care 12 Understanding Long-Term Care Insurance • Services Covered by Long-Term Care Insurance • Services Not Covered by Long-Term Care Insurance • How Long-Term Care Insurance Works • Optional Policy Features • Additional Optional Features 16 Texas Long-Term Care Partnership-Qualified Policies 18 Is Long-Term Care Insurance Right for Me? • Worksheet: Determining if Long-Term Care Insurance May be Right for You 20 Creating Your Comprehensive Long-Term Care Plan 22 Worksheet: Planning for Long-Term Care Expenses 24 Worksheet: Comparing Long-Term Care Insurance Policies 25 For More Information and Assistance2 WWW.OWNYOURFUTURETEXAS.ORG
  3. 3. Welcome!By requesting this kit, you’ve taken the first step towardpreparing for the years ahead.Planning for your long-term care may seem like a dauntingtask—but it doesn’t have to be. You can secure your futureby knowing your options, planning wisely, and taking action.The information and tools in this kit can help you get started.Remember, it’s your future. Own it! The Texas Long-Term Care Partnership was created by the Texas Legislature to give Texans like you the information and tools you need to plan forlong-term care. The Partnership is a collaborative effort between private long-term care insurance providers, their authorized agents, and state government agencies, including the Texas Department of Insurance, the Texas Health and Human Services Commission, and the Texas Department of Aging and Disability Services.
  4. 4. Understanding Long-Term CareLong-term care refers to a variety of services It isn’t just for the elderly.and supports that help you with health or Most of us think of long-term care as beingpersonal care needs over an extended period only for the elderly and those in nursing Did you know?of time. You may need long-term care if you homes, but that’s only part of the story. Forty 60% of people over agedevelop a prolonged or chronic illness, or percent of people currently receiving long- 65 will need some typesustain a serious injury or disability. Long- term care services are adults aged 64 and of long-term care.term care may also be needed if you develop under. And, most people receive long-terma cognitive impairment that causes memory care services either in their own home orloss or disorientation, such as Alzheimer’s, in the home of a family member—not in aor even if you just need assistance due to nursing home.the normal frailties of aging. Anyone could need help withThere is a difference between traditional everyday services and long-term care The fact is, anyone at any age may needservices. Health-care services focus on long-term care at some point in their life.the prevention and treatment of medical If you sustain an extensive injury or goconditions. Long-term care services are through a prolonged illness, you may needdesigned to help you maintain your current help with your normal daily activities suchlifestyle as much as possible at a time when as bathing, getting dressed, or just gettingyou may not be able to be fully independent. around the house. If you become cognitively impaired, you may need help with mealThere are several types of preparation and eating, reminders to takelong-term care. medications, or other kinds of support.The type of care you receive can varydepending on your particular need. “Skilled Although these everyday activities may seemcare” refers to care given by medical mundane, they are essential to maintainingpersonnel, such as a registered nurse or your independence. Your ability—or inabilityprofessional therapist. It requires a physician- —to perform these regular activities of dailyprescribed plan of care. “Personal care” living give long-term care professionals andfocuses on helping with your activities of those in the insurance industry a very practicaldaily living. It is less involved and may be measure to use when deciding if you needprovided by trained professionals or even long-term care. Activities of daily living,a family member. Long-term care may often referred to as ADLs, include suchalso include care management services to regular activities as bathing, dressing, usingevaluate your overall needs. the toilet, transferring to or from the bed or a chair, caring for incontinence, and eating.4 WWW.OWNYOURFUTURETEXAS.ORG
  5. 5. Your long-term care needs may change over time. Community-based services The amount and type of long-term care • Adult day service programs provide a Exploring your services you need will often change gradually variety of health, social, and other supportoptions for long- over time. For example, early on you may services in a protective setting, typicallyterm care services. need only occasional help for a few activities during normal business hours.The options available for of daily living, and may choose to receivelong-term care services • Meal programs provide meals in group that assistance in your own home. Over time,can vary greatly from settings or delivered to your home. however, you may begin to require morecity to city or region to regular assistance and choose to live in an • Senior centers provide a variety region. To find out what assisted living center. of social and educational are available inyour area, visit the Texas • Transportation services help get you Whatever your needs, there are an increasingDepartment of Aging to and from medical appointments, number of long-term care options availableand Disability Services shopping centers, and other destinations. for care in the home, in the community, andwebsite and click on through facility-based services.“Help for Texans.” Facility-based • Adult foster care provides a place to live, Home-based services meals, and 24-hour assistance. • Home health care typically includes skilled, short-term services, such as nursing, • Board and care homes, also called physical therapy, or other therapies ordered residential care facilities or group homes, by a doctor for a specific condition. are where residents receive meals, personal care, and other assistance. • Personal care services provide help with basic activities such as bathing • Assisted living centers provide a and dressing. community setting for those who need some assistance but do not need as much • Homemaker and chore services include care as provided by a nursing home. activities such as meal preparation and routine household chores. These • Continuing care retirement communities are sometimes considered personal allow seniors to remain in the same care services. community setting by providing accommodations designed to meet their health and housing needs, even as these needs change over time. • Nursing homes and skilled nursing facilities provide the greatest level of care with a full range of services. TEXAS LONG-TERM CARE PARTNERSHIP 5
  6. 6. Talking to Your Family about Long-Term CareFrom a practical standpoint, we all know How will you pay for your long-termthat talking about long-term care before the care expenses?need arises makes sense. Yet, more often 1. Have you accumulated enough savingsthan not, parents, children, spouses, and and resources to pay for your long-termpartners put off talking about it. Or, even care? Are you comfortable with theworse, we remain silent hoping that things impact this may have on your ability towill “work themselves out.” leave an inheritance for your family or provide for them in other ways?Sound familiar? 2. Would you sell your home to pay for care?Talking about aging, finances, and health can 3. If needed, could your children help paybe uncomfortable and awkward—they’re for your long-term care expenses? Wouldextremely personal and complex topics. you want them to? Have you talked withBut putting a plan in place before a crisis them about this?occurs can help ensure your long-term care 4. Are you counting on Medicaid? Are youchoices are known, understood, and able and willing to meet the eligibilityfulfilled. And that plan begins by having requirements, which may requirehonest conversations with those closest to “spending down” your savings and otheryou. Otherwise, you risk having important financial resources?decisions made for you at a time whenemotions are high, the choices are confusing, How will you maintain control ofand there’s little time to carefully consider your finances?all the factors—or weigh their implications. 1. Are you comfortable letting someone else take control of your finances? Who wouldDetermine what’s important you ask to do this?to you.This is one of those rare times when it really 2. How important is having peace of mind,is all about you. So before you do anything knowing you’ve planned in advance forelse, take the time to carefully consider your financial needs?and think about the following questions. 1 3. Would you consider designating aIf possible, have your spouse or partner financial power of attorney to managedo the same. When you’re ready, compare your finances the way you want?your answers. You may be surprised byhow much—or how little—your answersdiffer. And that’s okay. Finding out where 1 Questions based on content developed by Marlene S. Stum, Ph.D., Financialyou agree or disagree will help guide future Security in Later Life National Initiativedecisions and planning. Development Team Member from Family Social Science, University of Minnesota. Copyright 2002 University of Minnesota Regents. Materials may be copied for educational purposes only.6 WWW.OWNYOURFUTURETEXAS.ORG
  7. 7. Who will take care of you? Start talking and planning. 1. Is staying at home for as long as possible Now that you have a better idea of what important to you? If so, would you be you want, talk about long-term care with comfortable with in-home assistance? your children, family, or others close to you. What you discuss and with whom are 2. Do you expect friends, children, or entirely up to you. The important thing is other relatives to help take care of you in to have the conversation. Once you start, your home? you may find that everyone is incredibly 3. Would you move in with one of your relieved and grateful for the chance to talk children or another relative? Have you about it. Your discussions can provide the discussed this with them? foundation as you start creating your long-term care plan. 4. Do you consider living in an assisted living facility or nursing home an option? If you find your family is not comfortable talking about your long-term care needs, acknowledge their feelings, share your reasons for concern, and perhaps try again Talking to your family about at a later time. It is important, however, toyour future long-term care needs may seem start building your plan now, even if that difficult at first. But, you’ll means doing so without the input andfeel better knowing you’re all on the same assistance of your loved ones. Remember, page—and so will they. it’s your future. Take control of it. How to start the conversation. • e clear about why discussing the issue is important B to you. • e prepared. Make sure you’ve thought through key issues. B • emember that listening is also part of communication. R Recognize that family members will have feelings and opinions that may differ from yours. • ook for natural opportunities to talk. Use other people’s L circumstances to start a discussion with your family. Ask, “What would you have done if you were in that situation?” • pen the conversation with some of your concerns about O the long-term care decisions you’re facing. • on’t try to tackle too many issues at once. It may be D easier to have a series of conversations over time. TEXAS LONG-TERM CARE PARTNERSHIP 7
  8. 8. How Much Will I Need forMy Long-Term Care Expenses?Of course, no one can predict the future, • he national average: According to AARP, Twhich makes it difficult to determine how the average length of a nursing home staymuch you may need for your long-term care is approximately two-and-a-half years. You can find interactiveexpenses. But, be as prepared as possible by • hanging needs: Remember, the amount C calculators that helpconsidering a few factors: and type of long-term care services you estimate inflation-• Your age and gender: The chance of will need often increases over time. adjusted costs at the needing long-term care generally increases time you may need as you get older. Because women live • our family situation: You might plan Y long-term care services, longer, they are more likely to need long- for less overall long-term care if you have as well as find average term care than men. family members or loved ones who agree costs for services in your to provide—even for a limited time—any• Your family history: Have other members specific city or region at: of the home-based care you need. If you of your family needed long-term care are single, however, you may be more services? If so, what type and for how long? likely to need care from a paid provider.• Your current health: Are you in good general health? Do you have any current health conditions that may increase your likelihood for needing long-term care?Worksheet: Estimating Your Long-Term Care Expenses. *The costs presented in this worksheet are the average costs for services in theThis worksheet can help you estimate how much you may need for your long-term care state of Texas as of 2008. Costs may varyexpenses. Consider the factors discussed above when estimating how long you may need in your area.each type of service. Refer to page 5 for explanations of these services. Type of Service Average Monthly Cost* Anticipated Length Anticipated Total of Time Needed (Months) for Service Adult Day Services $1,170 x = Home Health Aide (4 hours per day) $3,360 x = Assisted Living Facility $2,764 x = Nursing Home (Private Room) $4,800 x = Nursing Home (Semi-Private) $3,570 x = Anticipated Total NeedThe amount you determined as your anticipated total need can help you plan for yourlong-term care expenses. Remember, this amount will significantly increase over timedue to inflation and other factors.8 WWW.OWNYOURFUTURETEXAS.ORG
  9. 9. Paying for Long-Term Care Expenses:What are My Options? Now that you have spent some time Home equity thinking about your long-term care options By the time you need long-term care, you and how much your care may cost, it’s may have greatly reduced or paid off your time to figure out how best to pay for those home mortgage or the value of your home expenses. Think about combining funding may have risen beyond its original purchase sources. For example, consider combining price. If so, there are several ways you can personal income and savings with a long- use that equity to pay for long-term care. term care insurance policy. These options may not be right for everyone, so make sure you thoroughly understand Personal income and savings the implications of each. Options to Some people may be able to pay for their consider include: long-term care services “out of pocket.” • Sale of your home. However, this could divert finances from • Sale-leaseback. other vital needs, such as your spouse’s living costs. Consider too that at the time • Reverse mortgage. you need long-term care, you may not have • Conventional home equity loan. a source of income other than your savings. If you choose to depend on your personal • Home equity conversions. income and savings, there is a chance you • Reverse annuity mortgage. may need to turn to your adult children to help with the high cost of long-term care. • Home modification loans. Long-term care insurance Life insurance Long-term care insurance policies can be There are several ways you may be able customized in a number of ways, enabling to use your life insurance policy to help you to get the services you need in the pay for long-term care. Check to see if your settings that suit you best. The cost of policy includes “accelerated death benefits” your long-term care insurance policy is or a long-term care rider. determined by several factors including: • The type and amount of services you Annuity contracts choose to have covered. Some annuity contracts allow you to withdraw money without a penalty to pay • Your age when you buy the policy. for long-term care services. If you have • Any optional benefits you select. an annuity, you may want to see if your contract includes this option or a long-term Long-term care insurance can help ensure care rider. you have the funds available to pay for your long-term care services when you need them. TEXAS LONG-TERM CARE PARTNERSHIP 9
  10. 10. Medicare, Medicaid, and Long-Term CareDespite what many people believe, very for a couple. What’s considered countablefew government programs will help pay income varies depending on your personalyour long-term care expenses, and those circumstances.that do have strict eligibility requirements • ou must have no more than $2,000 in Yand limits on what is covered. “countable resources” for a single person, or no more than $3,000 for a couple.MedicareMedicare is a health insurance program • ou cannot have home equity in excess of Yfor people age 65 or older, some disabled $500,000.people under age 65, and people of all ages • either you nor your spouse can transfer Nwith end-stage renal disease. You should income or assets in order to qualify fornot count on Medicare to pay for your Medicaid without incurring a penalty.long-term care needs. Medicare pays little You also cannot have transferred anyor nothing for care that helps people with resources in the 48-month period prioractivities of daily living for long periods to your application. The block of timeof time. Medigap insurance (supplemental these transfers are prohibited is calledinsurance for Medicare) is not intended the “look-back period.” By January 2011,to meet long-term care needs either, and the look-back period will increase toprovides no coverage for the vast majority 60 months.of long-term care expenses. • ou must have a “medical necessity”— YMedicaid a medical condition that requires the typeMedicaid provides health-care services for of care provided in a long-term carelow-income individuals. In Texas, Medicaid facility, such as a nursing home. If youpays for some long-term care services at qualify, there is usually no wait for thesehome and in the community. However, you facility-based services. The medicalmust qualify for Medicaid. Your eligibility necessity designation also allows youwill be determined by your need for to receive wide-ranging home- andlong-term care services and your income community-based services, but becauseand other financial resources, which must demand for these services is high, thesebe at or below set limits. services may not be immediately available. If you do not meet the medical necessityTo qualify for long-term care through designation, you may still be able toMedicaid: qualify for some personal care services• You must meet Medicaid income that help with activities of daily living. eligibility based on “countable income” Though you may not have to wait for limits. In 2009, the monthly income limit these services, they are more limited. for a single person was $2,022, and $4,04410 WWW.OWNYOURFUTURETEXAS.ORG
  11. 11. In essence, you will likely have to “spend For anyone who has worked and saved down” your countable resources if you for the future, accessing long-term care hope to qualify for Medicaid long-term care through Medicaid can be challenging and services. This includes your savings and financially draining. other resources that can be converted to cash. If you qualify but still have income, One other note: Medicaid is a payer of last Medicaid may also require that you pay a resort. If you qualify for Medicaid but have monthly co-payment to your long-term care other health-care coverage, long-term care facility or service provider. Any additional coverage, or another party is liable for your expenses Medicaid pays for your care may medical expenses, those sources will have be recovered from your estate. to pay first before Medicaid pays your long- term care claims.Medicare, Medigap, and Medicaid Coverage for Long-Term Care Services. * Long-Term Care Service Medicare Private Medigap Insurance Medicaid Nursing home care Pays in full for the first 20 days for May cover the $133.50/day May pay for care in a Medicaid-certified approved amounts in a skilled nursing co-payment if your nursing home stay nursing home if you meet functional and facility, but only after a three-day meets all other Medicare requirements. financial eligibility criteria. hospital stay. If you still need skilled care, will pay all but a co-payment of $133.50/day for days 21-100 per each benefit period. Assisted living facility Not covered. Not covered. Texas Medicaid does not pay for assisted (and similar facility options) living except through waiver programs, which have limited funding and require a wait period. Financial and functional eligibility requirements must be met. Continuing care Not covered. Not covered. Not covered. retirement community Adult day services Not covered. Not covered. May cover up to 10 hours per day, five days per week. May include nursing and personal care, noon meal and snacks, transportation, and recreational activities. May not be available in all parts of the state. Home health care Does not pay if you only need personal Not covered. Texas Medicaid may pay for limited care or homemaker services. Covers services, usually for less than 60 days, part-time or intermittent skilled nursing or through waiver programs, which care; home health aide services (if you have limited funding and require a are receiving skilled nursing care); and wait period. Financial and functional some therapies ordered by a Medicare- eligibility requirements must be met. certified home health agency.*Data as of December 2009; Medicare and Medigap data provided by TEXAS LONG-TERM CARE PARTNERSHIP 11
  12. 12. Understanding Long-Term Care InsuranceLong-term care insurance can help take Services not covered bythe worry out of how you’ll pay for long-term care insuranceever-increasing long-term care costs. With Long-term care policies may exclude In general, it’s betterthis increased security, you’ll have more coverage for some conditions, either to buy long-term carefreedom to determine the best options for completely or for a limited time. insurance at a youngermeeting your long-term care needs. age while you’re still Pre-existing conditions healthy. Your premiumsYou insure your home, your health, even An illness or disability for which you will be lower.your car. So why not purchase insurance received medical advice or treatment in thethat will cover possibly the most expensive six months prior to applying for long-termreality of life—long-term care? care coverage may be excluded for up to six months after the policy’s effective date.Services covered by long-termcare insurance Mental health and nervous disorders Long-term careNot all long-term care insurance policies Coverage of some mental health and insurance may be morecover all services, nor do they all pay the nervous disorders may be excluded, but affordable than yousame for similar services. Don’t hesitate to the policy must cover Alzheimer’s disease think. For an overviewask your agent as many questions as it takes and other age-related disorders. However, of long-term careto clearly understand your policy. Some of a company can deny coverage to a person insurance rates, visitthe most common long-term care services are: already suffering from Alzheimer’s.• Home health-care services, which may include skilled nursing care and Care by family members physical therapy. Most policies will not pay members of your family to take care of you, though some will• Personal care in your home, which may pay to train family members to be caregivers. include some homemaker services such as running errands or housekeeping. Other exclusions• Adult day services. Texas long-term care policies may exclude coverage for certain conditions resulting• Assisted living care. from such things as alcoholism and drug• Nursing home care. addiction, commission of a felony, or intentionally self-inflicted injuries. ConsultOther services offered by some policies with a long-term care insurance agent forinclude hospice care, respite care, care after more information.a hospital stay, help with household chores,or caregiver training for family members.12 WWW.OWNYOURFUTURETEXAS.ORG
  13. 13. How long-term care When payments start insurance works There is generally a waiting period before a Getting covered long-term care policy begins paying for yourDid you know? Long-term care insurance companies will care. This is known as the “eliminationIf you purchase a tax- sell you a policy only if you meet their period,” and it begins when your benefitsqualified long-term care established health guidelines. So, it makes have been triggered. You may have to paypolicy, you may be able sense to apply for coverage when you’re for any long-term care services you receiveto deduct part of the young and healthy. Answer all health during that time. The most common optionspremium from your taxes questions truthfully and thoroughly. Failing are for benefits to start at 20, 30, 60, 90,as a medical expense, to do this may result in the insurance or 100 days after you begin to receiveand the benefits you company canceling your policy or refusing covered services.receive from the policy to pay your claims.are generally not taxable The amount of your benefitsas income. When benefits start When you buy a long-term care policy,To learn more, download Different policies may have different insurance companies let you choose a dailyA Shopper’s Guide “benefit triggers”—conditions that must benefit amount for care in a nursing home,to Long-Term Care exist in order for an insurance company usually between $50 and $350 per day.Insurance at: to pay benefits. For example, a tax- If a policy covers home care, the qualified policy will only pay benefits is usually a portion of the nursing home when you are unable to perform at least benefit, such as 50% or 75%. It is important two of six activities of daily living without to know the costs of long-term care services substantial assistance for at least 90 days, in your area before you choose the benefit or have a cognitive impairment, such as amounts for your policy. For information on Alzheimer’s. You must also have a plan of costs, visit care prescribed by a licensed health-care practitioner. Non-tax-qualified policies may have benefit triggers that are less restrictive.
  14. 14. Understanding Long-Term Care InsuranceHow long benefits will be paid Optional policy featuresIt’s most common for benefits to be paid for All long-term care insurance policies soldone, two, three, or five years, or for your in Texas must offer the following optionallifetime. Generally speaking, the longer the features. Be aware, there may be anbenefit period, the higher the premiums. additional cost for these features.The lifetime maximum amount for thepolicy is usually calculated based on the Inflation protectiondaily benefit and the number of years you Inflation protection can help ensure yourhave chosen for your benefit period. benefits keep up with the rising cost of living. Even a 3% inflation rate can cut theRenewals and cancellations value of your dollar in half over 25 years.In Texas, long-term care policies are You should also assume health-care costs“guaranteed renewable.” This means the will rise more than the general inflation ratecompany must renew your policy each as the Baby Boomer Generation ages. Allyear unless you misrepresented your health long-term care insurance policies must offerstatus in your application, failed to pay your a 5% compound annual inflation protectionpremiums, or exhausted your benefits. rider as an option.You can cancel your policy at any time byproviding notice to the insurance company.When canceling, check your policy for how If both you and your spouse areit treats “unearned” premiums—premiums purchasing long-term care insurance, a “shared-care”you have paid in advance for coverage that or “joint” policy may give you morehas not yet been provided. coverage for less money. To learn more, download A Shopper’s Guide to Long-Term Care InsurancePremium increases at on long-term care policies mayincrease over time. Companies can raisethe premiums on policies that don’t havefixed rates, but only if they increase thepremiums for everyone in your “rate class.”A company cannot single you out for a rateincrease, regardless of any change inyour health or the number ofclaims you’ve made.14 WWW.OWNYOURFUTURETEXAS.ORG
  15. 15. Nonforfeiture benefit Restoration of benefits If you cancel your policy or lose coverage, Many policies restore benefits to the a nonforfeiture benefit guarantees you will original maximum amounts if you don’tHow is long-term care receive some of the benefits you have paid need long-term care services for a specifiedinsurance different from for. Generally, a nonforfeiture benefit will period—usually 180 days—after havinghealth-care, disability, pay up to the total amount of all premiums received benefits.and other forms of paid, or 30 times the daily nursing homeinsurance? Find out at: benefit at the time your policy lapsed— Refund of which ever is greater. A nonforfeiture Some companies will offer a benefit that benefit can significantly increase your will allow you to have some or all of your premiums. If you decide not to purchase this premiums refunded, minus any claims paid. option, you must reject the offer in writing. However, the terms of this benefit such as age limits, how it is refunded, or benefit Additional optional features amount, can vary.Ask your current or former In addition to inflation protection andemployer if you are nonforfeiture benefits, many companies As with all optional features, always beeligible for group long- may offer you other optional features as sure you fully understand the terms andterm care insurance, well. These options will increase your conditions of what you’re buying. Ask yoursavings plan annuities, premium costs, so carefully consider if long-term care insurance agent for anyor similar long-term they are right for you. clarification you may benefits. Waiver of premium When you are in a nursing home and the insurance company has started to pay benefits, the waiver of premium feature allows you to stop paying premiums. Companies may waive the premium as soon as they make the first benefit payment or after a specified time, usually 60 to 90 days. This provision may not apply if you are receiving certain benefits such as home health care or adult day care.
  16. 16. Texas Long-Term Care Partnership-Qualified PoliciesTexas Long-Term For example, assume you purchase aCare Partnership- Partnership-qualified insurance policy thatqualified policies will pay up to $50,000 in benefits, and you To learn more aboutprovide benefits, receive your maximum benefit. If you later Medicaid’s eligibilityfeatures, and need to apply for Medicaid, $50,000 of requirements, estateconsumer protections that are not available your countable resources will be set aside recovery policies, andwith other long-term care policies. These when determining your eligibility. And, if other guidelines, visitadditional features offer even greater you receive long-term care services through of your financial resources, such Medicaid, the state will not attempt to Click on the link, “Doesas your home and savings. Only agents who recover this $50,000 in protected resources Your Family Need Help?”have completed training required by the from your estate. then click on “People 65Texas Department of Insurance may sell and Older and PeoplePartnership-qualified policies. It’s important to note that buying a with Disabilities.” Partnership-qualified policy does notAdvantages of Partnership- automatically qualify you for Medicaidqualified policies should you need long-term care servicesDollar-for-dollar resource protection once your policy runs out. It does, however,A long-term care insurance policy can allow you to keep a portion of youroffer a great deal of comfort and security resources, even as you are considered forfor you and your family. But, the future is Medicaid coverage.unpredictable. There’s no way to know ifyou’ve purchased enough coverage. What This dollar-for-dollar resource protectionif your policy runs out and you need even feature is only available with Partnership-more long-term care services? If you have qualified long-term care insurance apply for Medicaid to cover these costs,you will likely have to “spend down” yoursavings and other resources to qualify.Having a Texas Long-Term Care Partnership-qualified policy can help preserve someof the financial security you worked yourwhole life to build. That’s because forevery dollar that a Partnership-qualifiedpolicy pays out in benefits, a dollar of yourfinancial resources will be set aside whendetermining if you qualify for Medicaid.16
  17. 17. Inflation protection State-to-state coverage Over time, the price of everything goes Texas Partnership policyholders who up, and long-term care services are no relocate to another state may be eligible toFor a side-by-side exception. In fact, the cost for long- receive dollar-for-dollar resource protection,comparison of term care services may even rise faster just as they would if they applied fortax-qualified and than inflation due to the high demand Medicaid in Texas. For a list of participatingnon-tax-qualified for services by the aging Baby Boomer states, visit, visit: Generation. That’s why qualified policies provide varying levels Ask about a Texas Long-Term Care of inflation protection based on your age. Partnership-qualified policy. When you’re shopping for a long-term care • Under 61 years old: You must purchase policy, be sure to look for a Texas Long- and retain some level of compound Term Care Partnership-qualified policy. annual inflation protection. Insurance All Partnership-qualified policies will be companies must offer you 5% compound accompanied by a statement that identifies annual inflation protection, but you can the policy as “Texas Long-Term Care choose to purchase at a lower rate. Partnership-qualified.” • Ages 61 to 76: You must purchase and retain some form of inflation protection, For a list of insurance companies that sell either compound or some other form, Partnership-qualified long-term care policies, until you reach age 76. visit • After age 76: Insurers must offer inflation protection, but you don’t have to purchase or retain it. Tax-qualification All Partnership-qualified policies are tax- qualified. This means you may be able to deduct part of the premium from your taxes as a medical expense. In addition, the benefits you receive from a Partnership- qualified long-term care policy are generally not taxable as income. For more information on the tax implications of purchasing a Texas Long- Term Care Partnership-qualified policy, consult with a tax advisor or visit TEXAS LONG-TERM CARE PARTNERSHIP 17
  18. 18. Worksheet: Determining if Long-Term Care Insurance May be Right for You.After answering these questions, you should have a better idea if long-term care insurance is right for you.Personal ConsiderationsDoes your family have a tendency for long life expectancy? Yes NoIs there a history of chronic or debilitating health conditions in your family? Yes NoIs there a history of Alzheimer’s or dementia in your family? Yes NoHave other members of your family required assistance with daily living activities for Yes Noa period of longer than three months?Do you have a spouse, adult children, or other family members who can care Yes Nofor you at home?Financial ConsiderationsPremiumsHow will you pay your long-term care insurance premiums? Income Savings/investmentsWill your family contribute anything torward your long-term care Yes Noinsurance premiums?Can you afford the policy if premiums increase, for example, by 20%? Yes NoAre you planning to retire in the next five to 15 years? If so, how will retirement No impact Minor impact Major impactimpact your ability to pay your premiums?IncomeWhat is your annual income? $How do you expect your income to change over the next 10 years? No change Increase DecreaseWill you be able to afford the policy if your income decreases? Yes NoResourcesNot counting your home, how much are all of your resources worth? Include your Under $30,000 $50,000 to $75,000savings and investments. $30,000 to $50,000 Over $75,000How do you expect your resources to change in the next 10 years? No change Increase DecreaseDo you have enough resources to justify the expense of a long-term care policy? Yes No TEXAS LONG-TERM CARE PARTNERSHIP 19
  19. 19. Is Long-Term Care Insurance Right for Me?There are two costs to long-term care— Long-term care insurance can go a longfinancial and emotional. Ask yourself: way toward securing your future. But it’s“What is the value of knowing my not right for everyone. Generally, financiallong-term care expenses will be covered? planners recommend you consider long-What is the value of being in control of my term care insurance if you have resourcesown long-term care choices? How important of at least $75,000 (not including your caris it to be independent for as or home); have annual retirement income oflong as possible?” at least $25,000 to $35,000 for an individual or $35,000 to $50,000 for a couple; and are able to pay the premiums without financial difficulty, even if the premiums increase over time. Long-term care insurance is probably not right for you if any of the following apply: • You cannot afford the premiums. • ou have limited resources. Y • our only source of income is Social Y Security or Supplemental Security Income. • ou often have trouble paying for utilities, Y food, medicine, or other important needs. • ou are on Medicaid. Y If you think long-term care insurance is right for you, consider your personal and financial situation. If possible, talk to a trusted financial advisor to determine if you should buy a policy.18 WWW.OWNYOURFUTURETEXAS.ORG
  20. 20. Creating Your ComprehensiveLong-Term Care PlanDetermining how you will pay for your Get familiar with local resources.long-term care expenses is a crucial part of The time to become familiar with thecreating your long-term care plan, but it’s long-term care services and resourcesjust one of many elements to consider. To in your area is well before you may evercreate a truly comprehensive plan, you also need them. Visit local facilities and talk toneed to consider other things, such as your them about their services and costs sopersonal situation, housing, and legal issues. you can know your options ahead of time.These planning steps can help you makesure you’re creating a well-rounded plan Financial planning stepsof action. Review your current insurance coverage. Do you know if your current health-carePersonal planning steps insurance would pay if you needed toAssess your likelihood of needing long- be in a nursing home or needed care at term care services. home for an extended illness? To learn Talk with your doctor about whether you what is covered and what is not, review might be more likely to need long-term the policies you have with your insurance care based on your medical and family advisor or employer’s benefits counselor. history or lifestyle choices. If necessary, revise the worksheet on page 8 based on Decide if you can—or want—to pay for long-term care privately. this information. If you don’t have coverage for long-termHelp maintain your health care or prefer to pay using your own and independence. resources, do you know if you would Many people fail to make the connection be able to cover all the costs with your between healthy behaviors today and the retirement income and savings? Think impact on life as you age. Healthy eating, about the financial resources you have physical activity, mental stimulation, and how you feel about using them to pay and regular health care are important in for long-term care. This could include maintaining health and independence.  various sources of income (for example, Social Security, pension, interest income,Talk with your family about caregiving. dividends from investments, or payments It is estimated that individuals turning from a 401(k) or IRA), as well as cash, 65 today could need up to three years of savings, stocks and bonds, and your home. long-term care services, with almost two years of that care provided at home. Talk to your family (spouse, adult children, siblings) or friends who have the ability and desire to care for you if you became ill or disabled for a long time. Refer to pages 6 and 7 of this guide to help get the conversation started. 20 WWW.OWNYOURFUTURETEXAS.ORG
  21. 21. Look for other resources that may cover Advance-care and your long-term care expenses. legal planning Consider all your financing options, Advance-care planning including long-term care insurance. It’s important to decide what types of care Review these options carefully to make you want to receive in times of emergency sure you understand all the details, or when facing end-of-life situations. You eligibility requirements, and costs. should consider your options while you have time to think through them clearly,Housing considerations and then discuss your preferences withYour current home or a new independent your family and those close to you. Making living situation? your wishes clear ahead of time decreases If you are like most people, you plan the chance of future conflicts and takes the to stay in your own home for as long decision-making burden off your family. as possible. Some important things to Your plan should reflect your personal consider include: the condition of your values and beliefs, and be adaptable if home and how much it will cost to circumstances change. maintain, how accessible your home would be if you become less independent, Legal documents Generally, there are two types of legal the cost of modifications if you need them, documents you will need. A “medical and the availability of long-term care power of attorney” appoints a specific support services in the area. person to make health-care decisions for you at any time you are unable to do If you decide to move, look for universal so for yourself. In the event you become design and accessibility features that will unable to speak for yourself, a “living accommodate your needs if you become will” provides written instructions for less independent. Consider a single- your care, including the extent to which level house, accessible condominium or you wish to receive life-sustaining apartment, or a retirement community medical treatments. Both of these that provides support services such as documents are available at transportation and housekeeping. Before you decide to move, also consider your home’s value, how much equity you have, the potential advantages of both buying and renting, and the related tax and legal issues, as well as whether this will be a short- or long-term move.  TEXAS LONG-TERM CARE PARTNERSHIP 21
  22. 22. Worksheet: Planning for Long-Term Care ExpensesNow that you have started thinking about your long-term care plan, it’s time to considerhow you might pay for it. There are a number of options, including long-term careinsurance, savings plan annuities, certain life insurance policies, or home equity. To helpguide your planning process, use this worksheet and the helpful online calculators Of course, these tools are for guidance only—they can’tprovide all the answers—so it’s always a good idea to consult with a financial planningprofessional, if possible.Step 1Begin with the costs you estimated for your long-term care expenses on page 8 of this guide,and then adjust for inflation. Use the online calculator at www.OwnYourFutureTexas.orgto calculate the inflation-adjusted amount. Total anticipated long-term care expenses Estimated costs, as determined on page 8 $ Estimated costs, adjusted for inflation $Step 2Now consider the financial resources you anticipate having available at the time you mayneed long-term care. Be sure to adjust these numbers to account for inflation or increasingvalue of resources such as home equity or personal savings. You can use the onlinecalculators at to help you do this. Anticipated resources available for long-term care expenses Today’s value Adjusted for future value Personal savings $ $ Life insurance benefit $ $ Annuity contracts $ $ Home equity $ $ Other funding sources $ $ Total resources available $ $22 WWW.OWNYOURFUTURETEXAS.ORG
  23. 23. Step 3Here’s where you look at your estimated costs for long-term care compared to the totalresources you think may be available. Subtract your total resources available from yourestimated costs.Estimated costs, adjusted for inflation $Less total resources available, adjusted for future value $Difference $If your estimated costs are greater than your total resources available, you may wantto consider purchasing a long-term care insurance policy to make up the difference. Should you consider long-term care insurance? Even if your anticipated resources are greater than your estimated costs, you may want to consider purchasing a long-term care insurance policy if: • ou are concerned that the financial resources you need to pay for your long-term Y care costs may not be available when you need them. • eaving an inheritance to your family is important to you. L • ou want to have more choices and options for financing your long-term care. Y • ou want greater peace of mind. Y • ou want to reduce the burden for others who will feel responsible for your care. Y • rotecting your financial security is important to you. P • ou want to increase your chances of having a good quality of life, regardless of Y your health status. • urchasing a long-term care insurance plan makes sense given your current P financial situation. TEXAS LONG-TERM CARE PARTNERSHIP 23
  24. 24. Worksheet: Comparing Long-Term CareInsurance PoliciesIf you decide long-term care insurance is right for you, use this worksheet to compare various policies. It’s a goodidea to compare the costs and benefits of policies from at least three different insurance companies. Make sure youbuy from a reliable company that is licensed by the Texas Department of Insurance to sell long-term care insurance.For a list of companies offering Partnership-qualified policies, visit Policy 1 Policy 2 Policy 3 Company Information (insert company name) Telephone number Financial rating Consumer complaint index Company licensed in Texas (yes or no) Number of years in business Policy form number Number of years selling policy form Premium Amounts Premium without riders and discounts $ $ $ Premium with home health care $ $ $ Premium with inflation protection $ $ $ Premium with nonforfeiture benefit $ $ $ Premium for optional rider: $ $ $ Premium for optional rider: $ $ $ Discounts you qualify for % % % Premium with riders and discounts $ $ $ Benefits the Policy Provides Years of coverage provided Total lifetime benefit Pre-existing condition wait period (yes or no) Benefits adjusted for inflation protection (yes or no) Tax-qualified policy (yes or no) Services the Policy Provides Nursing home care (yes or no) Assisted living facility care (yes or no) Home health care (yes or no) Daily and Monthly Policy Limits Daily Monthly Daily Monthly Daily Monthly Nursing home care $ $ $ $ $ $ Assisted living facility care $ $ $ $ $ $ Home health care/adult day care $ $ $ $ $ $ Elimination Periods (list number of days for each) Nursing home care Home health care24 WWW.OWNYOURFUTURETEXAS.ORG
  25. 25. For More Information and AssistanceVisit www.OwnYourFutureTexas.orgAt the Texas Long-Term Care Partnershipwebsite, you’ll find additional informationand tools, including educational quizzes,interactive calculators, advance-caredocuments, companies offering Partnership-qualified long-term care insurance policies,and much more!Long-term care information Eldercare LocatorNational Clearinghouse for www.eldercare.govLong-Term Care Information 1-800-677-1116www.longtermcare.gov202-619-0724 Family Caregiver Alliance www.caregiver.orgTexas Medicaid program information 1-800-445-8106Texas Health and HumanServices Commission Long-term care for federal and annuitantsDial 2-1-1 The Federal Long Term Care Insurance ProgramMedicare information www.ltcfeds.comwww.medicare.gov1-800-Medicare (1-800-633-4227) Legal rights and consumer protection informationServices for those who are aging or have Consumer Rights and Services Hotlinea disability, and their caregivers 1-800-458-9858Texas Department of Aging andDisability Services Texas Department of www.tdi.state.tx.us512-438-3011 1-800-252-3439 / 512-463-6515Local Area Agencies on Aging (AAA) Texas Legal Services www.tlsc.org1-800-252-9240 1-800-622-2520Administration on Agingwww.aoa.gov202-619-0724 TEXAS LONG-TERM CARE PARTNERSHIP 25
  28. 28. The Texas Long-Term Care Partnership was created by the Texas Legislature to give Texans like you the information and tools you need to plan for long-term care.28 WWW.OWNYOURFUTURETEXAS.ORG