QUESTION: What kind of Long-Term Care Insurance do you recommend?

Long Term Care Insurance (LTCI) can be a useful tool to help pay for healthcare services you or your spouse may need in the future. LTCI is a useful tool but not for everyone.

As a Geriatric Care Manager, I can work with individuals who already have LTCI and want to begin using it to help pay for their care. I can also help evaluate whether or not LTCI is a useful purchase for you and your spouse.

It is important to understand how LTCI protects you and helps pay for care. LTCI usually reimburses you for care you have already paid for. It does not pay for ALL your care. The LTCI plan will pay for as much care as your individual policy was set up to pay (usually a set dollar amount per day or month). If your care costs more than that benefit amount, you will pay the difference. If the care costs less than that benefit amount, you are reimbursed up to the amount you paid. An example; $150, or $219 per day or $4000 per month.

The type of LTCI policy you purchase greatly impacts the premiums you will pay. The larger and more generous the policy, the larger the more expensive premiums you may pay. Premiums can be very expensive ($400 per month or more).

The goal when buying these policies is to help pay for care, and to protect your assets. A good LTCI policy will help you pay for care without requiring you to use your life savings to pay for the monthly premiums. If paying the premiums leaves you short on paying your bills, you aren’t necessarily doing yourself any favors.

When reviewing types of policies, the most common cover homecare services, assisted living facility care and also care in a skilled nursing facility. I highly recommend you have a policy that works in all settings. You don’t know where your care is going to happen when you get to this stage of your life. A good policy will help to cover the cost of care wherever you end up.

Your LTCI policy should be large enough to pay for most of the care you need. If you have a policy that is $200 per day and you live in a skilled nursing facility that costs $395 per day, you will have to pay the $195 difference. That saves you half, but still costs you a significant amount of money each month.

A policy that pays $350 per day, when your care only costs $196, means the excess daily amount stays in your policy to be used for a longer period of time.

There are many new types of LTCI policies coming out all the time. One of the newer ones I have reviewed recently included both LTCI benefit along with a Life Insurance benefit. If you didn’t use up the LTCI benefit amount, the balance would be paid out at the end as a Life Insurance Benefit. That is a guaranteed payout either way.

I believe LTCI can be a useful tool as you age. It is important to understand you will probably pay the premiums for 15 or 20 years or more before you begin to receive benefits.

In reviewing this type of coverage, I would recommend getting one or more quotes for LTCI policies, then call us to review the policies and the options. Senior Life Matters will evaluate and compare each policy, explain how they work and how they may protect you. We can also evaluate your need to have LTCI. Not everyone needs LTCI.

I have helped people use LTCI to pay for their care. I have seen more people “save” the LTCI for someday and never actually get out what they paid in premiums or get reimbursed for care because they didn’t file a claim with the LTCI.

QUESTION: How do my spouse and I use Long-Term Care Insurance? Part 3

This is the third and final answer to this question; filing a LTCI claim.

LTCI insurance works by reimbursing you for care costs you have already paid. If you have help in the home, and you don’t pay them money (maybe they are family) the LTCI will not pay any benefit.

When you hire help in the home, the LTCI could potentially reimburse you for homecare costs. The caregiver completes LTCI paperwork explaining their qualifications and experience to become an approved provider of services by your LTCI Company. When approved, the caregiver will complete a timesheet each day indicating what they did, when they did it, how long they were there, and what they were paid for their service. This timesheet is usually submitted on a weekly or monthly basis to the LTCI Company. Before you are reimbursed for services, you must fulfill your elimination period, (90 or 100 day elimination periods are common). The elimination period means you must pay for care for 100 service days before the insurance policy will begin to reimburse you. When you have help 4 days a week, it would take 25 weeks to get through the elimination period. If you pay for help in the home every day or reside in an assisted living or skilled nursing facility, it will take 100 days or just over 3 months to receive reimbursement for those expenses.

The 100 day elimination period may sound reasonable, but when you are paying out of pocket it can seem like a long time before the money begins to roll back your way.

After the elimination period is completed, the insurance company will reimburse you for the approved care provided. You will continually submit timesheets on a weekly or monthly basis as long as you require care. This will continue until your situation improves so that you longer need the care, the policy is used up, or the individual passes away.

If you no longer need care and have benefits still left in your policy, this benefit stay available to you to use at a different time in your life when you need care again.

As a Geriatric Care Manager (GCM), I often work with individuals and their families to assist with the LTCI process. Many LTCI policies will reimburse you for a GCM’s services. The reimbursement usually has an annual allowance limit. The GCM benefit does not come out of the daily reimbursement limit for care, it comes out of a separate benefit within the policy. So using a Geriatric Care Manager does not lessen your reimbursement for other services.

LTCI is meant to pay for your care when you need. GCM can offer you insight into concerns and problems you have. As well as experience with the LTCI process.

If you get to the stage where you have used up the policy, congratulations! That means you received back more than the cost of your premiums! You won this insurance bet.

Some people worry about using up the policy, and then what happens? If your LTCI policy benefits are used up, you may evaluate eligibility for Medicaid. If you don’t qualify for for Medicaid, you may continue to pay for caregivers out of your own pocket, and there is no reimbursement.

Most individuals and families wait too long to begin using their LTCI policies. They don’t begin to make a claim for coverage until their situation is dire and overwhelming. I often hear from people, “I don’t want the policy to run out!” I say “YES you do!” That would mean you got your money’s worth out of the policy.

Good luck and remember you can always call the company to ask questions or for clarification of the benefits covered by the policy. SLM is a reliable resource for you to use when reviewing your policy and how you can use it to help cover your care expenses.

QUESTION: How do my spouse and I use Long-Term Care Insurance? Part 2

This is the continuation of the answer to this question; filing a LTCI claim.

You have called the company and started the claims process. You will receive a packet from your LTCI which includes claim forms you must complete and return within 30-days. There may be a form to be completed by your physician. There is a form to be completed by you, indicating your physical situation and medical history, and a HIPAA (Health Insurance Portability and Accountability Act of 1996) release form. The HIPAA form authorizes someone else to give and receive information/correspondence with the LTCI Company. The HIPAA form is very important to complete because every time you or your family call later on with questions or concerns, they will ask to speak with the insured individual first in order to get permission to talk with you.

Once the required forms have been completed, send them back to the LTCI Company for processing. The LTCI Company will have a healthcare professional perform a face to face assessment of your situation. This individual is usually a Registered Nurse (RN) who will complete one to two hour personal needs assessment and home evaluation. The RN’s evaluation will determine whether or not you need help with what you have reported on the paperwork. There is a prescribed list of questions and physical assessments that will be completed. The nurse will also evaluate the living situation to see if adjustments need to be made, grab bars, raised toilet seats, walkers, ramps, etc.

During this evaluation it is important to be truthful in your answers about care. It is also important to portray ‘your worst days’. Think about and describe those days that reflect how much care is required. We often want to portray ourselves in the best light. Here we need to portray our worst self.

The nurse’s evaluation is sent to the LTCI Company, where a case review is completed. Once this review is completed, the company informs you of their determination to cover care. That means they’ve either approved your ‘claim’ (will help to pay for care), or they’ve determined you do not need enough care/help to qualify for benefits at this time.

If the claim is approved they will mail a new packet of material to you. This packet will include a description of your coverage, benefits and the amount of money you can receive for services provided. This amount is your daily or monthly benefit level. That amount could be per day amount (for example $150 per day) or a monthly benefit ($4000 per month). The determination letter will include the length of your elimination period (30 days or 100 days) and your coverage period (how long the coverage lasts -for example -3 years).

The packet will also contain forms to be completed by care providers. More on these forms in next week’s article. The packet may contain Direct Deposit Authorization forms which enable you to have LTCI reimbursement payments deposited directly into your bank account. I would recommend using this Direct Deposit option as you will receive your reimbursement quicker. The LTCI will mail you a monthly statement including claim coverage and payments.

In the event that your claim for coverage is denied, you have a couple of choices; either you can appeal the decision with the LTCI Company, allowing you to provide additional information indicating why you feel the claim was justified and should be covered. This will likely require supporting documents from your physician.

Or you can wait a month or two and begin a new claim. Be sure that care is still necessary, and evaluate why the claim was denied. Make sure this time you address those issues more comprehensively. You are allowed to make as many attempts using the claim process as necessary to ensure coverage of your care.

QUESTION: How do my spouse and I use Long-Term Care Insurance? Part 1

I will be answering this question in three parts; understanding how to qualify, filing the claim and what to do when denied.

Long Term Care Insurance (LTCI) is an insurance product that is designed to help an individual pay for the care they receive when they are sick/infirm/frail. Long Term Care Insurance is NOT health insurance. It really is Care Insurance. To qualify for coverage you must need help with your care.

Generally the LTCI will begin to reimburse for care once help is needed with at least two Activities of Daily Living (ADLs) more than half the time. The ADLs include six activities: walking (ambulating), dressing, bathing, toileting, eating, and transferring (from chair to bed, bed to chair, etc.). As we become sick or infirm we may need help with these ADLs.

To expand on that a little, when you need help with bathing every time, either every day or once a week, that is going to meet the criteria. If you need help with eating, this means bringing the food from the plate to your mouth, not the preparing of the meal. If you need help putting on socks every day, but put on everything else independently that may not meet that criteria, but it could be part of the help you get once you qualify.

Another way of qualifying for payment (reimbursement for care) under LTCI is a diagnosis of confusion/dementia that impairs an individual’s ability to function without directions from others. So if you or your spouse have dementia, you could qualify to collect your LTCI benefit even if the need for help is inconsistent. Sometimes individuals with dementia can use the toilet independently, but can’t find the toilet, so they need help/supervision almost constantly. They may be able to feed themselves, but need prompting to stay focused on eating. They may dress themselves, but wear boots in the house and slippers outside, so they need monitoring or supervision to stay safe.

This change of condition can be an event or catastrophic change, a stroke, a fall where they break a hip, or hit their head. Sometimes this change is more gradual, a slow decline over time making it hard to put a date on when they began needing that much help.

Using this criteria you may find that you might qualify for using the LTCI policy to help pay for care. GREAT, that is why you paid those premiums all those months/years. You will need information like your name, date of birth, policy #, address, etc. You are going to be asked questions about diagnosis, physician, and what type of help is needed at this time. These questions are sort of a pre-screening for the insurance company. They are trying to get at “why you think you qualify?”

So think about that before you call. What are you getting help with? How often do you need the help? Who is it that helps? Have you been hospitalized recently? When did this need for help begin?

In thinking about these questions and the answers you give it is important to run through your answers before you make that call. We like to paint a very optimistic or positive portrait of our self and our spouse. For this purpose you need to be very honest about the needs that you have. How much help is necessary? It is more like thinking of the worse days in the week, not the best days to answer these questions.

So if you feel it is appropriate, pull out the actual LTCI policy and call the phone number listed on the policy. This is how you begin to file the claim. The representative will ask the necessary questions and send a packet of information that needs to be completed promptly and returned to them.

I will pick up next week to talk about filing the claim and more the week after.

QUESTION: What is the difference between my employer’s HSA and Flex Spending Account offerings?

Both of these options are useful ways to pay for medical expenses with benefits and limitations with pre-tax dollars.
A Health Savings Account (HSA) is a pre-tax way of saving money to pay for medical expenses later. The HSA is useful for those individuals who have a High Deductible Health Plan (HDHP). The HDHP must have a minimum deductible level of $1400 for individuals or $2800 for families. You cannot establish an HSA if your health plan isn’t a High Deductible Health Plan.

An HSA is an account that is in your name. The money deposited into the HSA is not taxed when taken directly from your wages. You can also deposit money into this account from other sources. You are allowed to deposit a limited amount into your HSA annually, for 2021 the limit is $3600 for an individual and $7200 for a family. If you are over 55 years of age there is a catch-up contribution of $1000 annually.

A benefit to having an HSA account is the money is always yours to use towards medical expenses for you and your family. The annual deposits will build up over time and be used over the course of your lifetime. These accounts usually earn some amount of interest, your funds will grow if you don’t use the money immediately.

Once you turn 65 and are eligible for Medicare you are no longer allowed to put new money into an HSA. The HAS account balance is yours to keep and use as you age, but you will not be able to deposit funds into the HSA once you are Medicare eligible.

A Flex-Spending Account (FSA) is an employee benefit that allows your pre-tax wages to be put aside and used for medical spending within a fixed period of time (usually annually). You set your amount annually when signing up for the FSA. For example, if you decide to set aside $1000 in your flex-spending account, your FSA is front loaded by a third party. Your wages are used to repay that amount over the course of the year. If you need dental work done in January the $1000 is available immediately and it is then ‘paid back’ over the course of the year with pre-tax wages. This can be a useful way to pay large medical expenses prior to having the money. The issue with having an FSA comes at the end of the year if you have not spent the entire $1000. The balance left over in your FSA is kept by the third party who agreed to front that money initially. You usually have three to six months after the year is completed to request that money back providing proof of medical spending receipts. If that time has expired your balance will be forfeited.

These two accounts are very different in a couple of basic ways. An FSA is preloaded upfront and you can pay it back over the course of the year with pre-tax dollars and without interest. In this situation if you don’t ever use the loan you were given, you still have to pay the money. This FSA also requires that you be employed to be enrolled in the FSA. You cannot establish an FSA without employment.

The HSA is a way to save money in your name for expenses in the future. If you needed dental care in January, your brand new HSA would not have much money in it to pay for that service. It takes time to save money with an HSA. One way to counteract this downside is pay the dentist in January and then use the HSA at the end of the year to pay yourself back for that expense. You simply provide receipts and proof of payment and the HSA will pay you back the money you paid prior to having the full amount in the HSA.

Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call us at 716-720-9797 or e-mail at SLM@lutheran-jamestown.org.

QUESTION: I have employer insurance coverage, but Medicare is saying I have to sign up for Part B. What do I do?

Medicare Part A, B and D have different rules. This article applies to the rules regarding Medicare Part B only.

Your current situation is: you are working, you carry insurance from your employer with Medicare Part A only. Medicare works hard to notify those eligible for Medicare to get signed up in an appropriate manner. Medicare sent you that letter because you only have Part A and they are reaching out to inform you about the GEP and the rules relating to Part B coverage.

For those individuals who have only Medicare Part A, Centers for Medicare and Medicaid Services (CMS) mails a letter to state that you may need to sign up for Medicare Part B. The General Enrollment Period (GEP) runs from January 1 to March 31 each year. The GEP is appropriate for those individuals who failed to sign up for Medicare Part B when they should have. If you missed your previous opportunity to sign up for Medicare Part B, you can sign up now during the Annual GEP and your Medicare Part B will begin 7-1-21.

For those individuals who turned 65 and are working, and/or covered by your (or your spouses) employee’s insurance, you can enroll in Medicare A and refuse Part B because you have insurance from another source. (When your employee group is larger than 20 employees and you are over 65 or larger than 100 employees if you have Medicare due to a disability).

You made the correct decision for your situation. If/When you lose your employee or spouse’s employee coverage, you should enroll in Medicare Part B immediately.

Once you stop working, or decide to drop the employee coverage you have a Special Enrollment Period (SEP) to sign up for Medicare Part B. You will need to complete the required paperwork to enroll in Medicare Part B. When Part B begins you will pay the Medicare Part B premium ($148.50 per month for most enrollees).

Some individuals don’t make that transition smoothly, because they don’t sign up for Medicare Part B in a timely manner (eight months from when your coverage ends).

If you go more than 8 months without Part B coverage and no insurance from another employment source, you will have limited opportunities to sign up for Part B. For Medicare Part B the GEP is from January 1 to March 31 each year. When you enroll using this GEP your Part B starts July 1.

Part B would then have a premium penalty, 10% for each 12 months lacking coverage. That penalty of 10% is based on the current Part B premium (10% of $148.50) and lasts for the rest of your life.

Some reasons people miss this enrollment in Medicare Part A & Part B is because they have insurance through work, or COBRA (Consolidated Omnibus Budget Reconciliation Act) or Retiree plan or a MarketPlace Plan. These last three reasons are NOT reasons to delay Part B. If you are carrying COBRA, or Retiree insurance or a MarketPlace Plan you MUST enroll into Medicare. There may be a reason to stay with these plans, but you still need Medicare Part A & B.

Some individuals are offered insurance at a lower cost or no cost to them when they first leave work, so they keep this insurance and then don’t sign up for Medicare Part B. If you aren’t going to work for the company that provides the health insurance to you, you need to have Medicare A & B.

The letter you received from CMS was a prompter for you to think about your situation relative to Part B. I am glad to review this GEP because there are not many Special Enrollment Periods (SEP’s) available to get you into Medicare Part B.

Thinking about Medicare and making decisions about Medicare can be confusing. Thank you for asking for clarification.

Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call us at 716-720-9797 or e-mail at SLM@lutheran-jamestown.org.