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Information about all aspects of finances affected by a serious health condition. Includes income sources such as work, investments, and private and government disability programs, and expenses such as medical bills, and how to deal with financial problems.
Information about all aspects of health care from choosing a doctor and treatment, staying safe in a hospital, to end of life care. Includes how to obtain, choose and maximize health insurance policies.
Answers to your practical questions such as how to travel safely despite your health condition, how to avoid getting infected by a pet, and what to say or not say to an insurance company.


Long Term Care insurance pays expenses if you need long term care at home, in an assisted living facility or in a nursing home. According to a study by MetLife, as of 2011, the average daily rate for a stay in private room in a nursing home was $239 or $87,585 a year - and prices are expected to continue to go up. (If you have later numbers, please e mail them to dlanday at survivorshipatoz dot org).

Common wisdom is that prime candidates for long term care insurance are people with assets to invest between $200,000 and in the $2 - 5,000,000 range. People with a lower amount of assets generally can't afford the premiums and may qualify for Medicaid either because of the current situation or by spending down assets. (For information about how to qualify for Medicaid, click here.)  People with assets over $2,000,000 can usually afford the necessary care depending on how easily the assets can be converted to cash.

If you have a history of a serious health condition:

  • Health conditions are reasons for denials or higher rates. You may have to wait a period of time such as 12 months after there is no longer evidence of disease before being able to obtain a policy.
  • Shop around if one insurer rejects you, charges a higher rate or imposes a waiting period before coverage starts.
  • You may be able to get coverage through an employer or other group where no health questions are asked. The federal government is one such employer. To learn more about the government offers, call: 800.582.3337 or visit: offsite link
  • Keep in mind that if you lie about your health history on an application and the company issues a policy, the company generally has the right to refuse to pay a claim when it learns the truth.

When considering which Long Term Care policy to purchase, look for a policy that provides the following::

  • The coverage you need. 
    • The cost of long term care depends on the severity of the disability, the amount of care which is required and your location. 
    • To learn the costs of nursing home care, assisted living care and home care in your state, see Met Life's Mature Market Institute: offsite link Look for "what's new". 
    • Because long term care insurance premiums are so high, only buy coverage that you really need. For example: A daily rate that reflects the costs in the area in which you are most likely to receive care. (Costs may be cheaper across the state line if you live near a border.)  Long Term care insurance does not have to cover 100% of the daily rate if you are likely to have enough assets to pay the different out-of-pocket. It should at least cover significantly more than 50% of the cost if possible.
  • A price you can afford now and in the future.
  • Built-in protection against inflation so the benefit doesn't become less meaningful or even worthless by the time you need it. (This may not seem important when inflation is low, but history shows that low rates of inflation cannot be counted on.)
  • Benefits for the period of time you'll need. Lifetime coverage is now rate - and is very expensive if offered. According to Bottom Line Personal, two-thirds of people who enter a nursing home stay less than one year. Only 10% stay five years or longer.
  • An elimination period that makes sense for you and the amount of premium. The elimination period is the number of days taht you must pay out-of-pocket before coverage starts. 
  • An insurer with the financial stability to have the funds to pay if and when you file a claim.

Before buying a policy, consider the following tips:

  • Are there alternatives that would work as well for you? For example, you can tap the death benefit of a whole or universal life insurance policy or the balance in an annuity to cover long term care expenses tax-free or perhaps home equity that you can tap - or children who can be counted on to pitch in..
  • The period of time. 
    • The longer the coverage, the more expensive. The American Association for Long Term Care Insurance surveyed insurers and found that 92% of buyers who have benefit periods of three-years, and eventually file a claim, do not exhaust their benefits. 
    • If you do exhaust your benefits: If you live in a state with a "Partnership,"  you may qualify for Medicaid while protecting assets up to the amount of the benefits that were paid while you were receiving Long Term Care.
  • A lower daily benefit than the cost of care in your area if you can afford to make up the difference.
  • How much of the premium may be deductible from income as a medical deduction. For information, click here, and scroll to "Long Term Care".
  • To quote Bottom Line Personal: "Don't just purchase the policy that offers the lowest premiums for a given level of coverage. Historically, the long term care insurers that offer the lowest premiums tend to later impose the steepest rate increases and/or decline the highest percentage of clalims. Instead, ask agents for the premium increase history and claim-approval history of every long term insurer from which you receive quotes. Your state insurance department should also be able to provide these figures."
  • If you are married, look for Joint Coverage - one policy covers both partners. Premiums are generally less than the cost of two separate policies.
  • A Partnership Policy can help you keep savings after long term coverage ends, and still qualify for Medicaid. (For information about Partnership policies, see below.)
  • A so-called hybrid policy which combines the features of a long term care insurance policy and either a life insurance policy or an annuity. (If you are considering this option, keep in mind that the long term care benefits are usually limited, and the cost of the life insurance element is usually expensive.)

If you don't buy a policy and need help figuring out how to obtain long term care and how to pay for it, contact your state Long Term Care Ombudsman. (To locate an Ombudsman in your area, see: offsite link)

Because prices and coverages vary, and it may be difficult to find a policy with a health history, it is advisable to work with a broker who specializes in Long Term Care Insurance and deals with several insurance companies. He or she is likely to know which companies will be favorable to your situation. Or you can purchase Long Term Care Insurance on line. It can be difficult to compare policies because there is no standardization.

If you don't have a broker, you can locate one in your area through American Association of Long-Term Care Insurance: offsite link, Tel.: 818.597.3227,

When you receive your copy of a policy, check it over. You have 30 days to review it and send it back if it's not what you want.

There are steps to take to reduce the risk that the policy will unintentionally lapse or a claim won't be filed in a timely manner, or at all.

If you have an older policy with limited coverage, find out if the insurer will add an amendment (a "rider") to bring it up-to-date. Alternatively, try to buy a second policy for the extra coverage.

Claims under a Long Term Care Insurance policy are usually straightforward. It is advisable to inform the person or people closest to you of the claims requirement in advance so they can take the necessary steps if you are unable to.

If your claim is turned down, it is generally worthwhile to appeal.

NOTE: Long Term Care insurance premiums are deductible as medical expenses, subject to a maximum. 

For more information, see:

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Medicaid Home Health Care

"Long Term Care" Defined

Long term care is assistance to help with the activities of daily living such as eating or toileting when you are unable to provide for yourself.  Care ranges from personal care at home to skilled nursing services at home or in a nursing home.

Different policies are likely to define various types of care differently. In general, the types of long term care are:

  • Skilled nursing care: Care needed for medical conditions that require care by specially trained nurses or therapists who are generally licensed by the state. This type of care is generally ordered by a doctor who determines the care to be provided. It is usually required on a 24 hours basis.
  • Intermediate nursing care: Care which requires daily supervision, but not 24 hours a day. It is care which is less specialized than skilled nursing care.
  • Custodial care (also known as "Personal care"): Care which is meant to assist with the activities of daily living such as bathing, eating, dressing and other routine activities. This type of care is generally provided by unskilled people.

How To Decide Whether To Purchase Long Term Care Insurance

Long Term Care Insurance:

  • Helps preserve independence.
  • Provides freedom of choice.
  • Helps preserve a standard of living.
  • Protects your assets.
  • Keeps you from being a burden on friends and family.

The older you are, the greater the likelihood that you will need at least some long term care. According to the MetLife Mature Market Institute, the national average for a private nursing home room in the latest year available (2012) was $90,520 per year ($248. per day). The average hourly rate for a home health aide was $21 or $210 for a 10 hour day.

On the other hand:

  • Common wisdom is that prime candidates for long term care insurance are people with assets to invest between $200,000 and the $2-5,000,000 range. People with a lower amount of assets generally can't afford the premiums and may qualify for Medicaid. People with assets over $2,000,000 can usually afford the necessary care depending on how easily the assets can be converted to cash.
  • You should not purchase Long Term Care Insurance if you can't afford the premiums now or in the future. Premiums are likely to continue to climb. Even if a company has a history of not raising premiums, or only raising them a minimal amount, this does not guarantee what a company will do in the future. If you stop paying premiums, you lose all the money you've paid to date.

According to the National Association of Insurance Commissioners, you should also not buy long term care insurance if:

Before purchasing a Long Term Care Insurance policy, consider the alternatives for paying for long term care. To learn more, see Alternatives For Paying For Long Term Care.

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Medicaid SSI 101

Effect Of A Pre-Existing Health Condition

A pre-existing health condition is a condition for which you received medical advice or treatment or had symptoms within a certain period of time before you apply for an insurance policy. The length of the time period (referred to as "the look-back period"), as well as the facts which are considered, are defined in each policy and vary from company to company.

Some insurers will sell a Long Term Care Insurance policy to a person with a pre-existing condition. However, the company will generally not pay benefits for care related to that condition for a period after the policy goes into effect.

If you don't disclose a pre-existing condition, the insurer may not pay for treatment related to that condition or it may cancel the policy totally. If you lie on your application, the insurer can usually cancel the policy within two years after the policy is issued. In some cases, the policy can even be cancelled later.

Long Term Care Partnership Policies

Thanks to the Federal Deficit Reduction Act of 2005, states can have a Partnership program to provide asset protection for people who buy Partnership qualified long term care insurance policies.

The program kicks in once jpolicy time limits run out. Historically, once benefits run out, you have to pay remaining costs yourself until just about all your assets are gone so you can qualify for Medicaid long term care benefits. However, under the Partnership Program, you can keep more of your savings and still qualify for Medicaid. The way it works is that your assets are protected up to the total amount of coverage you received from your policy before you exceeded the coverage limits. For example, if your policy limit was $200,000 and all the money was spent, you can keep $200,000 in assets and setill qualify for Medicaid.

To learn whether your state has a Partnership Program, and if so, the Program details, see the web site of The Partnership For Long Term Care by clicking here offsite link.

Health Conditions Which Are Most Likely To Require Long Term Care

According to the Society of Actuaries, medical conditions which most commonly require long term care in order of frequency are:

            Neurological system disorders
            Alzheimer's disease
            Mental and nervous disorders
            Circulatory disorders
            Respiratory diseases

How To Purchase A Long Term Care Insurance Policy

Because of the difficulty of purchasing a Long Term Care Insurance Policy for a person with a history of a serious health condition, it is advisable to get help from an experienced broker and/or use an online service that can obtain several quotes.

You can locate a broker specializing in Long Term Care Insurance through web sites such as:

You can obtain online quotes at several websites including the following well known sites.

NOTE When reviewing home care benefits- check to see ifa policy allows you to use the policy to pay for care by family members or neighbors.  Some insures require 100% of home care to be provided by licensed providers who are hired through an agency.

What Happens When You Apply For A Long Term Care Insurance Policy

Insurers look at your health history and current status before deciding whether to issue a Long Term Care Insurance policy (and, if so, at what price and other terms). This process is known as "Underwriting."

Underwriting may include:

  • Review of your medical records.
  • A telephone call to you with questions to determine if you have a mental (cognitive) impairment.
  • A visit from an insurance company representative to check on ongoing problems with your physical or mental status.

What To Do When You Receive Your Long Term Care Insurance Policy

It is advisable to read and understand every provision of any insurance policy you purchase. This is particularly true with Long Term Care Insurance because if you become so ill that you need the benefit, you will most likely not wish to do battle with an insurance company at that time. For example, you are generally required to pay for the first days of care - for example 90 days. Are those calendar days or just days you receive care? If you get home care, do you have to use a special agency or can you hire caregivers yourself? Does assisted living cover the cost of housing or only the care you receive? Can you choose the location in which to receive care?

Don't rely on what a sales person tells you or even what promotional literature states. If it's not in the policy, you're not covered. Check your policy.

You generally have 30 days after receipt of a policy to review it. You can return the policy during that period of time for a full refund of your premium if you decide it's not for you.

If you have difficulty understanding the provisions, hire a professional to help you such as a Financial Planner or a Lawyer - not the person who has a financial interest in selling you the policy.

What To Do Once You Have A Long Term Health Insurance Policy

  • Keep in mind that you have to keep paying the premiums to keep the coverage in existence. 
  • Always get a receipt for a payment. 
    • Your cancelled check will do as will a deduction from a bank statement that indicates the Payee and amount. 
    • If you pay a premium in cash, get a receipt (and keep the receipts with a copy of your policy).
  • To avoid losing the policy because of forgetfulness or if you become mentally impaired or incapacitated:
    • Consider paying premiums automatically so they're paid even if you're not feeling well. This can usually be set up either with your insurance company or your bank.
    • Money Magazine suggests that you designate an advocate who knows that you have a policy, what it covers and where you keep it. Also require the insurer to inform the person if you stop paying the premium. 
  • If your premium increases, you have three choices. You can pay the higher premium, reduce coverage to reduce the cost or terminate the policy. If you can't afford the higher premium, explore lowering the cost by reducing the benefit amount, the period over which you receive beneits or by lengthening the period of time before the benefit starts. 

NOTE: Even with Long Term Care Insurance, there will still be costs you will have to pay - so it's wise to do what you can to save money now. Our article on How To Deal With A Financial Crunch has money saving tips.

Filing A Claim Under A Long Term Care Insurance Policy

Long Term Care insurance generally has specific requirements for filing claims. If the rules described in the policy are not followed exactly, the claim may be denied. It is advisable to inform people closest to you of any such requirement in advance so they can take the necessary steps if you are unable to.

To start the claim, call your insurer's toll free number and report your claim. If you purchased the policy through a broker, also let him or her know. The company will send a form which includes a part for you and a part for your attending doctor to complete.

If you haven't already signed a waiver of the federal privacy law generally referred to as HIPAA and other privacy protections, you will be asked to sign one now.

In addition, insurers generally require an interview with the insured to assure that covered care as defined in the policy is required (and to get an idea of how long that care will be needed). Most often, the interviewer is an independent person hired and paid for by the company (not an employee). The interviewer will speak with you and assess your needs. He or she will ask questions such as:

  • What is your average day like?
  • What happens when you try to _________ (for instance, go to the bathroom, get out of bed)

When you answer the questions, don't minimize the difficulties. At the same time, don't lie and make them worse than they actually are. Keep in mind that the insurer will be checking your doctor's records and will likely compare what it says you've previously reported and what you say during the interview.

To learn more about how to respond during an interview, see our article about what to do when an interviewer comes calling to check whether a person continues to be disabled who is receiving Social Security Disability Insurance. To learn more, see: When An Investigator Comes Calling.

If your claim is turned down, appeal. The concepts are the same as if you are appealing a claim under a Health Insurance Policy. To learn more, see: Health Insurance: Claims: Appeals

Before hiring a care providing service that you expect to be paid by your Long Term Care Insurance Policy, make sure the service is qualified as required by your insurance company and pre-approved by your insurer. Generally this means being licensed by the state in which you reside. You'll save time if you submit information about the agency when you submit your claim - for instance by sending in a copy of the agency's license.

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Qualifying For Medicaid If Your Benefit Runs Out

Historically, you had to spend just about all of your savings before you could qualify for Medicaid to cover the cost of long-term care. However, many states have established partnership programs that let you protect some retirement savings and still qualify for Medicaid. The only requirement is that you purchase an approved long term care insurance policy.  Most new policies qualify. So do many older ones.

To illustrate how these partnership works, let's assume that you purchase qualifying long term care policy with $200,000 of coverage (To calculate the amount of coverage, multiply the daily benefit by the period of time over which it is paid).

If you spend all the money and still need care, you can shield $200,000 of your assets and Medicaid will pay the rest of your nursing bills for life.

To find out if your state has a long term care partnership program, see: offsite link.

Long Term Care Ombudsmen

A long term care ombudsman is a person who helps with everything involving long term care - from finding a nursing home that meets your needs to resolving problems that arise if you are living in a long term care facility.

An ombudsman can either explain your rights and how to resolve an issue or can act on your behalf. 

All 50 states have state and local long term care ombudsman programs.  Most local programs rely on trained volunteers.

To locate the web site and phone number of your state Ombudsman program, go to : offsite link or call the Eldercare Locator at 800.677.1116.

Reviewed by:

David Flecker, CLU, ChFC

Executive Vice President

DeWitt Stern Group, Inc.

New York, NY