Medicare’s Missing Gap to Long Term Care
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| Medicare Part A - D |
How many of you been to an all-you-can-eat buffet or
salad bar at a deli only to find your helping is missing? You go to a buffet to have a full meal but you
find slabs of leftover sauce instead.
What happened? You came at the
off-hour. What do you do? You fill in the missing share.
Federal health insurance programs are created to assist
the poor, elderly, and disabled. Anyone
over 65 years of age who qualify to receive Social Security are eligible for
Medicare. Anyone who is qualified to receive
Social Security disability for at least 2 years are eligible and are not liable to
pay premiums. But did you know that
Medicare Part A covers only 100 days of skilled nursing care at the hospital? If you have known anyone who needed skilled nursing
care for assisted daily living activities (ADLs)—bathing, dressing, eating,
toileting, continence, transferring— know that you need to sign up for
more. What do you do? You fill in the missing share. Long Term Care policies are designed to
support at least 1 year of skilled nursing care after elimination period.
fun fact: 72% women and 44% men will be adl disabled or cognitively
impaired after age 65.
Medicare Part A covers insured in-patient hospital service. First 60 days pay for all charges. 61st to 90 days are paid with coinsurance amount. In-hospital patients are usually under acute care that have suddenly changed their health from sickness or injury but are quickly recoverable. But as per skilled nursing care, Medicare fully pays for the first 20 days after you pay your annual deductible. Next 80 days are subject to daily coinsurance amount. Part A also covers Home health service necessary for skilled nursing. Hospice care for the terminally ill are also under cover; recipients must forego all other services except physician services and treatment for terminally ill conditions. Hospice care provides palliative care to terminally ill patients reducing severity of symptoms of the disease. Hospice care alleviates physical, emotional, social discomforts of a person. (e.g. Home health aides, social workers, doctors, nurses, therapists, bereavement counselors.) Part A has a lifetime reserve of 60 days (when you use more than 90 days in-hospital care with applied coinsurance). Part A is financed by employment-related tax funds (through Social Security FINRA) and is financed by contributions from employer and employees. Owners can put their employees for 100% tax deductible.
fun fact: 49% turning 65 will need long term care at some point in their lives. 72% will
use home care services. [Georgetown University, ltc Financing
Project, Who needs Long Term care? (2002)]
Long Term Care is an individual health insurance policy designed to provide benefits on an expense-incurred, indemnity, or prepaid basis for necessary care or treatment of an injury, illness, or loss of capacity by a certified or licensed health care provider in a setting other than acute hospital care. Medical and non-medical assistance are listed under personal care. Acute care is medically intensive for a limited time period. Long Term Care coverage goes on over an extended period of time for chronic or disabling conditions that require nursing care or supervision.
Long Term Care encompasses 3 different types of
care:
Skilled Nursing Facility Intermediate
(rehabilitation) care facility Custodial (nursing home)
care facility
fun fact: Yearly base rate for a private room in a nursing home is $204, $74,460
per year.
Long Term Care provides care when a person is unable to perform Activities of Daily Living —mobility, dressing, personal hygiene, eating. Long Term Care insurance usually comes in $40 to $100 per day, 1 year to a lifetime. Benefit periods vary: 2, 3, 4, 5, 7, 10 or unlimited.
Long Term Care embodies 4 components:
Home Health Care: Individual’s home for nursing, speech and
physical therapy and other home health care services. Assistance with non-medical and non-skilled
services including cooking, cleaning, laundry, running errands. (i.e. CNAs,
home health care aides, professional caregivers) Respite: family member is reprieved from their
care-giving role. Hospice: Terminally-ill for those that have 6 months
or less to live at home or facility.
Medicare pays for most hospice costs.
Skilled Nursing: care supervised by Registered Nurse in a
facility that provides stay, health information, and dietary needs.
Sources of payment for nursing home care:
Medicaid 48% Medicare 12% Out-of-Pocket 28% Private Insurance 7% Other Public 2% Other Private 3% Medicaid pays significant coverage for nursing home
care. While Medicare supply limited
nursing and some home health care, Medicaid pays for more than 40% of the
country’s nursing home care expenses. Nursing
home residents receiving Medicaid must contribute most of their income to the
cost of care.
Medicaid was created in 1965 to expand the role of
the federal government in health care financing by permitting states to receive
matching funds to expand their public assistance programs to individuals with
insufficient income to pay for medical care.
Medicaid is financed by both federal and state and administered by individual
states. Covered costs vary in each state. Provides supplemental
medical care for low-income or needy that are aged, blind, disabled, or under
the age of 21. Provides aids to families
with dependent children. fun fact: nursing home stay average length is 876 days. 10% 3-6 months 12% 5
yr < yr 13.6% 3
yr < y < 5 yr 14.2% 6 mo < y < 12 mo. 20% <3 months 30.3% 1
yr < 3 yr
fun fact: 19% of seniors suffer from some degree of chronic impairment. Optional Long Term Care Benefits include:
Inflation Protection
provides daily and maximum daily benefits increases that are guaranteed and automatic. Benefits
are annual percentage based on simple or compound interest rate.
Return of Premium (non-forfeiture)
that provides a lump sum cash payment to the policy owner upon lapse or
surrender of the policy (50%, 75%, 90%) of total premiums paid.
Guarantee of Insurability to
purchase additional insurance. Amounts
within specified parameters regardless of insurability. fun fact: “My mom would always say to me, ‘I am not ever going to need care like
that so insurance is a waste of money.”
—Suzy orman [pays $20,000 per month for her mom’s health care]
 Long Term Care plan includes necessary diagnostic,
preventative, therapeutic, curing, treating, mitigating, rehabilitative services
for the chronically-ill. Long Term Care is
considered chronic and A person is most likely uninsurable if he/she suffers from cognitive impairments such as Alzheimer’s, dementia, or other mental problems that interfere with their ability to care for themselves. Here are some uninsurable conditions: Alzheimer’s, ALS (Lou Gerig’s Disease), Cerebral Palsy, Dementia, Multiple Sclerosis, Myasthenia Gravis, Parkinson’s Disease, Post Polio Syndrome, Tremors, Cerebral Vascular Accidents or Transient Ischemic Attacks, Muscular Dystrophy. Combinations of these conditions result in adverse underwriting: Diabetes and stroke; Vascular conditions and smoking; Respiratory disorders and smoking; Obesity and joint problems; Heart disease and smoking. If you take prescribed drugs for certain health problems like Parkinson's, Multiple Sclerosis, Severe Chronic Pain, Memory Loss, and Dementia, you may turn out to be uninsurable. (e.g. Akineton, Alkeran, Amplex, Artane, Avinza, Baclofen, Cogentin, Dopar, Enbrel Haldol)
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