About Long-Term Care

It’s something no one really wants to think about, but it’s a possibility at any age. An accident, an illness, complications from surgery, even a recreational injury can incapacitate you for weeks, months or, in the worst case, indefinitely. Most health-insurance policies offer limited coverage. When that’s not enough — or when that runs out — then what?

Today, the average cost of one year in a convalescent setting (rehabilitation center, nursing home, etc.) is upward of $75,000. Surprisingly, the average stay is more than three years. This kind of expense can quickly deplete a lifetime of savings.

What Is Long-Term Care?

Long-term care refers to the services that help meet both medical and non-medical needs, outside of a hospital or nursing home, for an extended period. Often, this means convalescent care — the services required when you have lost the ability to perform by yourself some or all of the normal activities of living. You may need care until you recover sufficiently; or you may need it for the rest of your life.

It Pays to Plan Ahead

Preparing for a serious, unknown health event doesn’t make you an alarmist; it makes you an educated consumer. If you’ve managed to save money or to buy a home, you want to protect your assets. The younger you are when you plan, the easier and cheaper it is to protect yourself in the long run.

What Does Private Health Insurance Cover?

Private insurance (what many working people receive or pay into through an employer), usually covers the acute care phase of illness and most accidents, but does not cover the cost of convalescent care. (Acute care refers to the initial treatment of a medical condition that is of short duration or at a crisis period.) After retirement, most people rely on Medicare for their health insurance.

What Does Medicare Cover?

Under the current provisions, Medicare covers the following:

• Up to 100 days of skilled care in a nursing home or rehabilitation center

  • Payment in full for the first 20 days
  • Partial payment for 21-100 days (co-payments required)

• Home care only if you are also receiving skilled care, such as nursing or rehabilitation; Medicare does not pay for convalescent care alone

With Medicare, you qualify for care only if you require the services of a licensed professional (e.g., a nurse or physical therapist) and as long as you show signs of improvement. If you have a stroke, for example, and cease to improve after 30 days, Medicare stops paying for your care.

How Can You Protect Yourself?

The solutions for long-term care are limited:

• Your loved ones can provide your care indefinitely, assuming they are able and the burden is manageable, given their own life demands and obligations.

• You can pay for the care indefinitely out of your own pocket, using your income or savings.

• You can qualify for Medicaid — government assistance for the financially needy, under which you have no say and no recourse regarding the kind or quality of care.

• You can transfer the risk, by purchasing long-term-care protection.

The Medicaid Catch

Some people try to leverage the system by transferring all their assets to a family member in order to qualify for Medicaid. This strategy typically comes with a major catch.

For example, with the passage of Acts 42 and 43 in Pennsylvania, the government can look back over a five-year period at your finances and see exactly what assets you’ve transferred and to whom. If you need care before this “look back” period is over (i.e., within five years of transferring your assets) the state takes the average monthly cost of care, divides it into the money you transferred, and subtracts that from your benefits. Think of it this way: if you need care four years after transferring $60,000 to a relative, and the average cost of care is $6,000 a month, you would be responsible for paying the first 10 months of any care you need by yourself.

Each state has its own and often ever-changing laws designed to discourage this misuse of the Medicaid system.

Transferring Your Risk

Long-term-care insurance is one way to transfer your risk, but it comes with disadvantages of its own.

In “Aged, Frail and Denied Care by Their Insurers,” The New York Times describes the continuing crisis of claims denial by long-term-care insurance companies. According to the March 26, 2007, article, thousands of grievances and lawsuits have been filed in recent years by elderly policyholders. In California alone, nearly one in four long-term-care claims was denied in 2005, according to the state’s records. The Times reports that data from the National Association of Insurance Commissioners show that from 2003 to 2005, Pennsylvania received more complaints regarding three of the largest long-term-care insurers than any other state. Read The New York Times article.

A Better Long-Term-Care Solution

Friends Life Care offers the benefits of long-term-care insurance with none of the disadvantages, plus a whole lot more. Our goal is to help you remain in your home as long as safely possible. We coordinate, provide and monitor your care with experienced, carefully selected professionals, and offer integrated wellness programs to help you maintain your health and independence. We are a nonprofit organization built on the Quaker values of honesty, integrity and respect for human dignity. And, we can say with confidence: The Friends Life Care Plan is the best long-term-care option you can find anywhere.

For More Information

Contact us for answers to your questions or to schedule a meeting with one of our Plan Counselors with no cost or obligation.
In Pennsylvania: 215-628-8964
In Delaware: 302-426-1510