Northern Financial Management

Long-Term Care

Long-term care describes a variety of services in the area of health, personal care and social needs of persons who are chronically ill or infirm.

What Are the Chances That You Will Need Long-Term Care?
Nursing home admissions indicate that 40% of all persons age 65 and over will enter a nursing home in the future.¹

Are You a Candidate for Long-Term Care Insurance?
You are, if:

	You want to choose the type of care you receive from your available options.
	You want to spare your family responsibility for your long-term care.
	You want to preserve an inheritance for children and grandchildren.
	You have the finacial resources to pay for the coverage.

Can Medicaid Help Pay for Long-Term Care?
Medicaid is a welfare program funded by both federal and state governments. It was enacted to provide health care services for the truly impoverished of our nation. Eligibility for benefits under the Medicaid program is determined by each state, based on an individual's assets and income. Recent legislation has made it extremely difficult to qualify for Medicaid benefits by gifting or otherwise disposing of personal assets for less than fair market value.

The Omnibus Budget Reconciliation Act of 1993 (OBRA '93) provided that gifts of assets within 36 months (60 months for gifts to certain trusts) prior to applying for Medicaid could delay one's eligibility for benefits. Other provisions of OBRA '93 allowed a state to recover from a person's estate (including trusts, jointly held assets, etc.) all of the payments made by Medicaid.

How to Minimize Impact on the Estate
How can you keep your estate from being depleted by the need for long-term care? There are currently a number of insurance companies that offer LTC insurance policies. Some are individual policies, while others are obtained an association or employer (group policies).

What Should You Look for in a Long-Term Care Insurance Policy?

Flexibility to be designed according to your needs.
We all have different lifestyles as well as financial goals, this is why it's important to be able to choose a plan that is tailored to meet your needs.

Clear and understandable policy wording.
Look for clear, favorable policy form wording, in terms of claims eligibility and exclusions.

Coverage for a variety of needs.
With a wide range of services available these days, from home and community-based services as will as residential care facility services, you may want the flexibility of having a long-term care insurance policy that pays for all these options.

Home health care on a monthly basis.
It's important that your coverage reimburse you for home health care on a monthly basis. This gives you the freedom to schedule help as you need it without the restrictions that can come with daily limits.

A stable insurance company.
Long-term care insurance is only as good as the company behind it. Look for a solid financial history and high marks from the independent rating companies.

¹ See Best's Review, Life and Health Insurance Edition, July 1995, v.96, n.3.

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