Long-term care questions draw on the federal LongTermCare.gov site and CMS. The key is knowing what long-term care is, and why other coverage rarely pays for it.
What long-term care is
Long-term care is help with everyday activities over a long period. Most people who use it receive it at home. Need is usually measured by activities of daily living (ADLs), such as bathing or transferring to or from a bed or chair.
- Skilled care needs a licensed professional such as a nurse or therapist, for example wound care by a licensed nurse.
- Custodial care is personal help with daily activities.
- Respite care is temporary care that gives a family caregiver a break.
What Medicare and Medicaid pay
Except in specific circumstances, Medicare does not pay for most long-term care or personal care such as help with bathing. It covers short-term skilled nursing facility care after a qualifying inpatient hospital stay of 3 days in a row or more, and stops after 100 days in a benefit period. Medicaid can pay for long-term care, but federal law requires states to recover what Medicaid spent from the person's estate after death; the estate is exempt while a spouse survives.
How a policy pays
- A benefit trigger, such as needing help with activities of daily living, starts the claim.
- The elimination period is the time that must pass after the trigger before payments begin, like a deductible measured in time. The insured pays for care during it.
Buying it
Most individual policies require medical underwriting. A life insurance policy or annuity can be exchanged tax-free for a qualified long-term care contract under section 1035 of the tax code, and HSA money may be used to pay long-term care insurance premiums, one of the few premiums an HSA can pay.