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Planning for the Future: Long Term Care

Andrea Zaite, MSSA, LMSW, CMC, C-ASWCM

How Will I Pay?

I want to introduce you to the web site run by the federal government called  Long term care is defined as receiving assistance in the areas of daily living such as bathing, incontinence care, cooking, shopping, medication reminders, etc.  The website is courtesy of the U.S. Department of Health and Human Services.  This site covers some topics I think are important to those looking to plan for the future or to help pay for the care of a loved one recently in need, but without the financial means to write the check.

We know from experience that Medicare, Medicare replacement and commercial insurances do not pay for these services.  They are not considered medical care so they are not covered.  I agree that most chronically ill and elderly patients would benefit from these services as a part of care to prevent re-hospitalization, however Medicare doesn’t see it that way.  I have found many people wading through the myriad of services provided in the handbooks come across home care and assume this is the same.  The Medicare, Medicare replacement plans and commercial insurance are talking about medical home health ordered by a physician.  Home health is a medical service which includes a weekly nurse visit called skilled nursing care that may last 15-30 minutes to take vitals and deal with any medical problems and education; Occupational Therapy for upper body; and Physical Therapy for lower body and ambulation. Temporary bathing aid can be ordered for several visits to ensure patient can safely bathe. Home health is meant to be a bridge from illness to recovery; from hospital to home. There are restrictions as well; a patient must be home bound, and is usually time limited with the need to show improvement.

The next question and road block to obtaining this care is the cost. Long term care is expensive by the nature of the care required and location of services.  Most private duty home care can range from $12.00 – $25.00 an hour with some company’s requiring a 3-4 hour minimum.  Average monthly cost whether provided at home or in an assisted living, board and care home, or nursing home, can average as high as $5,000.00 to $6,000.00, with home care usually the least expensive if the home is in good condition and the home is owned outright.


The options to pay for your long-term care have improved over the past 10 years because the need for this type of care has increase so dramatically.  These options include:

  • Long term care insurance

  • Combination Life/Long term care products

  • Accelerated death benefits

  • Life settlements

  • Viatical Settlements

  • Reverse Mortgages

  • Home equity loans

  • Annuities

Long Term Care Policies are generally obtained by those in the planning phase as they are less expensive the younger you are.  These policies can be activated once an individual is determined to have 3 deficits in the area of activities of daily living skills.  Most policies cover private duty home care, assisted living, and long-term nursing home care.  Policies have a 3-month waiting period and require an evaluation by a care manager that either works for the insurance company or is contracted by the recipient.  The evaluation is to determine the need for services and determine the 3 main deficits in the Activities of Daily Living Skills.  I have discovered that there are families and clients that don’t realize they may have these policies either because this was not discussed with the children or often the wife didn’t know her husband purchased the policy.  Many private duty home care companies and assisted living facilities will help you activate the policies if needed.  Some insurance policies will reimburse you for the cost incurred during the 3 month waiting period others consider that to be an out of pocket cost.

Combination Products are for those persons who would like a guaranteed return on their investment by combining life insurance with a long-term care plan so if you don’t use the long-term care component you can still collect on the life insurance or at least your beneficiaries can.  Many of the same rules apply as for long term care.

Accelerated death benefit feature of a policy allows you to receive a tax-free advance on your life insurance death benefit while you are still alive.  You may have to pay for the option to have this feature or it may be part of the policy.  There is the stipulation that you are terminally ill or have a life-threatening diagnosis or need long term care for an extended period of time verified by a physician.  This feature is usually capped at 50% of death benefit.  This type of policy is limited but can be a helpful in an emergent situation.

Life settlement option of a policy allows you to sell your insurance policy for its present value to raise cash for any reason.  This option is usually only available to women age 74 and older or to men 70 and older.  The down side is the income generated may be taxed as capital gains but the up side is you need not exam and no doctor statement.

Viatical settlements option allows you to sell your life insurance to a third party.  This option is like a life settlement but is only available to those who are terminally ill or have a life expectancy or 2 years or less.  The payments are based on life expectancy limitation due to illness or injury that must be verified by your physician.  The payment percentage is based on this number so for example someone with a life expectancy of 1 – 6 months may have a payout of 80% of benefit and someone with a life expectancy of 6 – 12 months would receive 70% of benefit and so on.

Reverse Mortgages are a good option if you have a home that is paid off.  You should go to a reputable mortgage company or bank to discuss this option.  Many reverse mortgages allow you to choose between a lump sum payment, a monthly payment, or a line of credit.  You continue t live in you home but you are responsible for up keep, taxes and insurance.  The stipulations to this option include being 62 years of age or older, and this must be your primary residence.  Your spouse can continue to live in the home after you die and there is an option to pay back the mortgage if your family decides they want the home.

Annuities seem like the least popular option as they can have an effect on your taxes and affect your eligibility for Medicaid.  There are 2 types of annuities; immediate and deferred long term care annuities.  Trust can be drawn up to help disperse the funds and protect them from Medicaid regulations.  This should be discussed with an elder care attorney.

The options discussed above and other related subjects can be found on the long-term care website.  I also recommend you visit another website called  This company has been doing business since 2007 in response to the Medicaid spend down for senior to qualify for long term care.  They help convert policies into living benefits.  Several agencies and assisted living facilities use and recommend them.

An Aging Life Care Professional® can help you to evaluate your circumstances and develop a plan that is right for you and your loved one.   They can also recommend and refer you to elder care attorneys, financial planners, ad insurance companies to help navigate the waters of long term care.

About the Author: Andrea Zaite, LMSW, C-ASWCM, CMC, is an Aging Life Care Association Advanced Professional member and a Board Member of the South Central Chapter.

This blog is for informational purposes only and does not constitute, nor is it intended to be a substitute for, professional advice, diagnosis, or treatment. Information on this blog does not necessarily reflect official positions of the Aging Life Care Association™ and is provided “as is” without warranty. Always consult with a qualified professional with any particular questions you may have regarding your or a family member’s needs.

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