WA LTC INITIAL 8 HOUR COURSE
Chapter 2: Long-Term Care Services
Long-Term Care Services
Long term care services can be virtually any type of care provided over a period of time. The exact period of time varies, depending upon the context, but federal legislation stipulates no less than 90 days. In Washington long-term care policies must provide benefits for at least one year.
If an individual in failing health or with a cognitive disability has family and friends who are willing to provide care, he or she will probably begin to initially receive services in their own home from those he or she knows. In the first stages, the individual will need help with only a few parts of daily living; perhaps housekeeping duties must be taken over by a daughter or grandchild or the elderly individual needs help bathing a couple of times a week. Gradually, as the individual worsens, more care will be required. There may be issues of safety, especially if cognitive impairment is part of the medical condition. If family members and friends can provide many hours of their time to the care of the individual it may not be necessary to seek any outside help for a long time, but eventually this does usually become necessary. Especially if medical conditions exist that make informal care dangerous it may be necessary to seek care from a nursing home or assisted living facility at some point.
Long-term care can mean many different things but any chronic or disabling condition that requires nursing care or constant supervision can bring on the need for long-term care services. Long-term care means not only care in a nursing home but also nursing care in ones own home and help with the activities of daily living, such as dressing, eating, bathing and taking medicine.
There are many different services that would fall under the definition of long-term care. These services include institutional care, i.e., nursing facilities or non-institutional care such as home health care, personal care, adult day care, long term home health care, respite care, and hospice care.
Defining Long-Term Care Services
Nursing homes are licensed nursing facilities. There are other long term care services that provide people with an option other than nursing home care. These services are defined below:
Home health care consists of services received in your home, and can include skilled nursing care, speech, physical or occupational therapy or home health aide services.
Home care (personal care) consists of assistance with personal hygiene, dressing or feeding, nutritional or support functions and health-related tasks.
Adult day care is for persons living at home, and provides supervision for elderly persons during the day when family members are not at home. It is a method of delivering a variety and range of services including social and recreational, and in some cases, health services, in a group setting.
Assisted living facilities provide ongoing care and related services to support those needs resulting from a person's inability to perform activities of daily living or a cognitive impairment.
An alternate level of care in a hospital is care received as a hospital inpatient when there is no medical necessity for being in the hospital and is for those persons waiting to be placed in a nursing home or while arrangements are being made for home care.
Respite care includes services that can provide family members a rest or vacation from their care-giving responsibilities. It can be provided in a variety of settings including an individual's home or a nursing home.
Hospice care is a program of care and treatment, either in a hospice care facility or in the home, for persons who are terminally ill and have a life expectancy of six months or less.
Long-term care is very expensive; most people cannot afford to privately pay for long- term care services for very long. When friends and family are able to fully or partially provide the needed care it can mean the difference between maintaining financial security and completely loosing all assets, as they are used to pay for formal care.
Home health care is also expensive. The average cost of home health care varies widely across the United States, with Washington being one of the more expensive places to receive such care. Assuming 20 hours of care per week, this represents average home health care costs of $10,000 to $22,000 per year. The actual cost will depend upon where in the state one lives and the type of care that must be received. If informal or custodial care is all that is required an individual with no medical training can be hired to perform the services. If medical knowledge is required to provide the care, costs will be higher.
The chance of needing some type of long-term care services is fairly high. It is estimated that over 40% of all persons who were 65 years old in 1990 will enter a nursing home during their lifetimes.[1]
Medicare does not pay for most long-term care services. Individuals should not rely on Medicare to meet their long-term care service needs. Medicare does not pay for custodial care when that is the only kind of care needed. Even skilled nursing facility care is covered by Medicare only on a very limited basis.
In order to obtain Medicare coverage of a skilled nursing facility stay, the following five conditions must be met:
If the skilled nursing facility stay continuously meets all of the above conditions, Medicare will provide benefits for up to 100 days of skilled care in a skilled nursing facility during a benefit period. During the first twenty days of care, all covered services are fully paid by Medicare. For the next 80 days of care, Medicare requires a copayment (the amount the patient must pay) per day.
If a person needs skilled health care in their home for the treatment of an illness or injury, Medicare can pay for home health services furnished by a home health agency. The individual does not need a prior hospital stay to qualify for home health care. Medicare pays for home health visits only if all four of the following conditions are met:
Once all four of these conditions are met, Medicare will pay for covered services as long as they are medically reasonable and necessary. Coverage is provided for the services of skilled nurses, home health aides, medical social workers and different kinds of therapists. The services may be provided either on a part-time or intermittent basis, not full-time.
Medicare pays the full cost of medically necessary home health visits by a Medicare-approved home health agency. The individual does not have to pay a deductible or coinsurance for services. If the patient needs durable medical equipment, he or she is responsible for a 20% coinsurance payment for the equipment.
Medicare will not pay for full-time nursing care at home, drugs, meals delivered to the home, or homemaker services that are primarily to assist the patient in meeting personal care or housekeeping needs.
Medicare supplement insurance is designed to fill in some of the major gaps in Medicare coverage, but Medicare supplemental policies do not pay for long-term care needs.
Other private health insurance that an individual might already have covers mainly acute conditions and probably does not cover custodial care.
Medicaid, a governmental program for low-income individuals and families, is currently the major source of funding for long-term care services. In order to qualify for Medicaid coverage, persons must meet certain income and asset tests. Because of the high cost of nursing home care, more than half of those who enter nursing homes privately paying for their care reach this level in less than a year.
Care Options
When a person or the persons family realizes that some type of care must be acquired beyond what the family can provide there are care options, including:
Whatever type of care is ultimately decided upon, it is best to be prepared before the services are actually needed. As an individual begins to age either he or his family should consider their options and what those options will cost. Being prepared beforehand can make a difficult situation easier to live with.
Some buying decisions are easy for consumers. A new car can be set in, driven, and admired. A long-term care nursing home policy, on the other hand, is an abstract decision. It cannot be seen or touched in the same way a new car can. Decisions to purchase such protection are based not on current ability to use the product, but rather on a mere possibility of future needs. As a result, this type of buying decision is made differently.
Is Insurance Necessary to Cover Services?
How does a person know if they will need some form of long-term care (and possibly long-term care insurance)? Statistically women are more likely to require formal long-term care than men and they are also more likely to buy a policy. Those who read extensively are more likely to buy a long-term care policy than those who do not. Those who have purchased other types of insurance on a regular basis are more likely to buy coverage than those who seldom buy insurance products. These statistics say little about whether or not a person needs long-term care insurance, however.
Any individual that buys long-term care products must understand what they are buying. Just as the automobile buyer wants to be able to sit in the vehicle and drive it around the block, insurance buyers want to understand the need and value of a recommended policy. Not only will this keep business on the books, but it also allows the consumer to have the peace of mind they are seeking. When a consumer does not understand what they have purchased, there will be constant hesitation and questioning of the product.
The thought of being in a nursing home is not pleasant, but neither is spending all ones life savings on such care. It is a truth that each aging American must face: someday someone in their immediate family is likely to need the services of a nursing home or home health care agency. Half of all women and one-third of all men will spend some time in a nursing home, according to Elder Care: Choosing & Financing Long-Term Care.
Ongoing Long-Term Medical or Personal Care
Any type of ongoing medical or personal care may be referred to as long-term care. It can mean almost anything including nursing home care, home health care, community-based care, adult daycare or in-home services. The book Long-Term Care & Its Alternatives written by Charles B. Inlander, Michael A. Donio and J. Lynee Dodson lists a wide variety of services available. For most people, the traditional care received is either in a nursing home facility or in their own home with the help of home care services, such as in-home nursing, hospice, or the help of family and friends. Even so, there are other alternatives. Some are well known while others are on the extreme and unlikely to be utilized by the general consumer.
America has an aging population and this has likely contributed to the interest in long-term care products. We are simply living longer and, for the most part, healthier. In the 1950s, the average age of a person in a nursing home was 70; today the average age is more than 80. At one time it was illness or injury that landed a person in an institution. Today it is just as likely to be the frailty associated with aging. As we age, the needs we have increase because we are not able to do as much as we could when we were younger. Our eyesight, hearing and mobility may become impaired. In addition, our thinking and judgment may become clouded. As lack of judgment increases errors may be made that put the individual in physical danger. The elderly are also more likely to make financial errors as they lose their ability to think matters through.
The elderly population is one of the fastest growing segments in our country. This simple fact alone has multiplied the need for nursing homes and nursing home financing. When Medicare was passed in 1965 there were 18 million Americans aged 65 or older. Today we have more than 34 million Americans who are 65 years old or older. That has impacted Medicare tremendously and it has also impacted how we care for our increasing elderly population. The years to come will see a great financial burden on our younger taxpayers if individuals do not begin making personal financial plans to pay for their care in nursing institutions. We have begun to see the government address this problem through the passage of legislation. As of 1997, persons who qualify can deduct part or all of their premium dollars for nursing home insurance from their taxable income if they purchased a qualified plan or had a plan that was grandfathered in under the new legislation. To qualify, federal taxes must be itemized and total medical expenses must exceed 7.5 percent of the taxpayer's adjusted gross income (AGI). Only the amount in excess of 7.5 percent can be taken as a deduction. Consumers owning qualified policies will want to point this out to their accountants.
No Durational Coverage Under Medicare
Initially many people believed that social programs would cover their long-term care needs. It was thought that Medicare and Medicaid would pay whatever costs came along. Today agents certainly know that is not true and consumers are realizing it as well. As a result, long-term care contracts have become an accepted insurance product.
Consumers often do not feel they want to spend what it costs to purchase a nursing home policy. Perhaps their children have even told them "I will never let you go to a nursing home." While children mean it at the time they seldom realize the scope of caring for a chronically ill or mentally incompetent parent. No one wants his or her parents in a nursing home. Probably no one really wants to go to one either. In some situations, however, there is simply no other logical alternative. Understanding this is the first step in choosing a policy that will allow the person to go to the facility of their choice when the time comes.
Remaining At Home
Most of us would rather remain at home when we are ill. No one really knows the true figures on how many people are cared for at home. It is thought that family and friends provides 70 percent of home care without receiving government paid services. Few families can afford to hire agencies to provide such care in the patient's home. They hire (at lower rates) non-licensed personnel to come in and care for aging parents or relatives. Those families who do take care of it on their own often desperately need help. If they knew of government programs that would help pay the cost, they would take advantage of it.
The spouse is the most common caregiver. Following the spouse, daughters are most likely to care for their elderly parents. This might be as simple as cooking their meals or as complex as moving in and providing full time care. Sons are much less likely to provide physical care, although they may help in some other capacity. Few daughters have the ability to leave their own family responsibilities to care for ailing parents. Since she cannot abandon her own family's needs, she must instead combine the duties of both. Doing so will mean eliminating virtually all of her own free time. This is especially true if she also holds a job. She is likely to give up hobbies and personal activities. Her own family will certainly feel the strain placed upon her. Few daughters can simultaneously care for their parents and their own family adequately, so feelings of guilt occur and sometimes depression becomes a factor as well.
Since the first caregiver is typically the spouse, he or she is the first to feel the strain. Statistically, the wife is more likely to be taking care of the husband than the other way around. Women live longer and usually marry older men so this is not surprising. Whether the first one to become ill happens to be the husband or wife, however, the healthy spouse will be the initial caregiver. The success of home care will depend upon the severity and type of illness. In some situations, the spouse will do very well. In other situations, the ill health of one may eventually cause the caring spouse to become strained and ill themselves. Then, instead of one sick person, there are two that need care.
Home Care Insurance Policies
There are insurance policies that provide benefits for care at home. These policies vary, with some being extraordinarily good and others being quite inadequate. Certainly most people prefer to remain at home. Consumers often buy home care policies in the hope that they will not have to go to a nursing home when they become ill. They feel that their care will be more satisfying at home. It is true that a person's emotional health may remain stronger at home, although their physical health may not allow it. It is unfortunate but true that whether or not a person owns a home health care policy seldom is a factor when determining health care needs. There are many things that will determine where a person must receive their care, but insurance is not generally one of them. When the patient lives alone, home care often is not a solution, unless a friend or relative is available to move in with them.
When home care is viable, there is a wide range of services available. In the past, most home care insurance policies have required that a Medicare certified agency provide the care. Many states no longer allow this. More care is given without benefit of a policy than with, anyway. As a result, it is impossible to know precisely how much home care is actually being received. In addition, with the issuance of integrated plans, home care and other alternative forms of care are seeing greater use since the policyholder has the ability to use the long-term care funds in whatever manner is desired, as long as the care is appropriate for the medical condition.
Medicares Home Care Benefits
Part A of Medicare will pay for some home health care services. There is often much confusion regarding home health care. Patients often feel it should be their decision, not Medicare's. However, Medicare follows specific rules of payment. Regardless of what a patient thinks, those rules will be followed.
Part A of Medicare will pay the full cost of medically necessary home health visits if the beneficiary satisfies their definition of homebound. When that definition is satisfied, coverage includes:
1. Part time (not full time) skilled nursing care and home health aid services. The care received must always be skilled. Neither intermediate nor custodial care is covered.
2. Physical therapy
3. Occupational therapy
4. Speech-language therapy
5. Medical social services
6. Durable medical equipment such as wheelchairs, walkers, or oxygen
7. Medical supplies
Any of these services may be received as long as the patient is homebound, as defined by Medicare. They must also be under the care of a doctor who has requested these services.
It is important to remember that only skilled care qualifies, not custodial or intermediate care. There are gaps in Medicare's services for those needing care at home. Services not covered include:
1. Full-time home care services (only part-time services are provided);
2. Drugs and biologicals;
3. Meals delivered to the home, although other types of social services often provide this under certain conditions;
4. Homemaker services, such as cooking or cleaning;
5. General daily maintenance care, such as bathing or getting dressed (custodial & intermediate care).
Medicare Qualification
The quantity of visits by home health care personnel is unlimited as long as the patient meets all of the qualifications set down by Medicare. The patient pays nothing since Medicare will cover all eligible costs. There are conditions, which must be met before Medicare will cover services. These conditions include:
1. A doctor must certify the need for home health care.
2. The treatment may only require part-time skilled nursing care, physical, speech or occupational therapy. Again, it must be stressed that only part-time care is given and only skilled care. Full-time care and custodial or intermediate care is not covered.
3. The patient must be homebound. This means he or she is unable to do a normal outside routine of shopping, yard care, or other routine chores.
4. A doctor must set up the home health care plan, which is provided by a Medicare contracted home health care agency.
Of course everyone wants to remain at home. Especially when one is ill, home brings emotional comfort and security. It is not unusual for a person, who is beginning to experience bad health, to ask their children to promise to take care of them at home. This is an unfair request. Few children would have the heart to say "no." It puts the child in the position of handling the needs of their parent first while placing the needs of their own children and spouse second. There are other reasons that such a request is foolish: few children are equipped by training or experience to give the type of home care that may be necessary. As a result, they may actually be putting their recovery in jeopardy by requesting an untrained child supply care.
Assessing Care at Home
Home care does often work well. The viability of it must be individually assessed. When it is physically and medically possible, a caring family and network of friends are often what makes it work. The next door neighbor who is willing to pick up groceries; the granddaughter that helps with household chores, the son who maintains the yard, and the daughter who is willing to attend to personal needs all lend to its success. A successful recuperation from an illness or injury at home will depend upon cooperative help from many family members.
Some older long-term care insurance policies included some home health care benefits or adult day care benefits. Newer policies generally have additional benefits offered as a rider for additional premium. Although it is not the primary aim of the policy, these benefits do offset the family's costs. Most of the home health care benefits attached to long-term care policies that are not integrated plans are limited in some way based upon the benefit received in the nursing home. The most likely limitation is a ratio of home health care benefits to nursing home benefits (generally 50 percent). In other words, if the nursing home policy will pay $100 in an institution, it will pay $50 for care at home. These policies may require that a Medicare certified agency provide the care, although some states have prohibited such a requirement. When the policy requires a Medicare certified agency, it will not pay for care given by a neighbor, granddaughter, or other relative, unless they are hired through a Medicare certified agency. Since many states felt this unfairly limited the use of the policy, they prohibited such a requirement. As long as the care is given in an appropriate manner, these states require the policy to pay whether the caregiver is hired through such an agency or not.
Gatekeepers
No policy pays for everything. There are always gaps and gatekeepers. A gap is a hole in the coverage; a gatekeeper is a condition which must first be met before benefits are payable. The buying consumer needs to be aware of these conditions and gaps so that he or she may make the best choice possible when selecting benefits. The agent must be aware of them so that he or she can best advise their clients.
Protecting Against Catastrophic Costs First
Most health care specialists recommend consumers first purchase a long-term nursing home policy since institutionalization is the most expensive type of care. If they can afford the premium, home care benefits should be purchased secondly. Another option is the purchase of an integrated plan, which provides a specified amount of funds that may be used for any type of care relating to long-term care needs. Few individuals could adequately save or invest to pay personally for the cost of long-term nursing home care. Such care easily runs upward of $4,000 per month. Rates are climbing faster than inflation. How many people, even with good investments, could afford to pay $48,000 or more per year in nursing home costs for one person? It should be remembered that the healthy spouse still must pay his or her living costs. When Hillary Clinton, President Clinton's wife, was addressing reporters on their proposed national health care plan, she was asked what health insurance agents should do since she would be putting them out of business. She replied that they should investigate selling long-term care insurance. Hillary Clinton knew the importance of such insurance because she had been actively studying the health care needs and choices of the United States. She knew the government had no plans to pay these costs.
End of Chapter 2
United Insurance Educators, Inc.