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Medicare Long Term Care Benefit
My wife and I have been Medicare eligible for several years. During that time, we had our Part B premium deducted from Social Security, paid premiums on a Medicare supplement plan, purchased a Part D drug plan, plus paid LTC insurance premiums. Every year we look at our spending and ask ourselves if the coverages are worth it – and this year we came to an interesting conclusion. We have decided to drop our Medicare Supplement plan, but we will keep our LTC insurance plan. Since my wife let me make the decision, here’s my reasoning, and why I think many 65-year-olds might want to consider spending their insurance premiums on LTC insurance instead. Medicare Decisions First, like anyone who qualifies for Medicare during open enrollment, I have to decide if I want a Medicare Advantage plan. Of those eligible for Medicare, approximately 69% are part of traditional Medicare while 31% have Medicare Advantage plans. Personally, I am not interested in Medicare Advantage plans, which include managed care. Another potential problem with Medicare Advantage plans – people who choose Medicare Advantage plans at age 65 when they first become eligible can be locked out of the Medicare supplement market because of pre-existing health conditions if they decide to return go to traditional Medicare. Before I became Medicare eligible, I would discourage people from buying Medicare Supplement insurance because the risk seemed far too small to insure for wealthy people. It’s kind of like when the person at an electronics store asks you to buy insurance on a new TV—most people can afford to buy a new one if the thing breaks and you don’t have to insure those risks that you itself cannot assume. The idea of betting against an insurance company for small risks is usually pretty stupid. You need to insure that loss that would be financially devastating to you, not emotionally necessary. However, after becoming eligible for Medicare, I ignored my own advice! I rationalized two reasons for the change of heart. First, the premium was deductible from the business and second, writing checks for the small difference between what Medicare pays and the doctor charges for Part B expenses would drive me crazy. Now, however, I am dropping my Medicare Plan C supplement because the carrier raised the premium to $3,000 a year for me and my wife. Think about it – we would need about $30,000 in doctor expenses at the 20% copay rate to equal the $6,000 in premium. This is an amount of exposure that we can ensure ourselves. The fact that Part B premiums are increasing also makes it an easier choice. BTW, we also own a Medicare Part D drug plan, which costs about $18 each per month for each of us. It’s a good value for the benefit. The downside to dropping Medicare supplement coverage is that any future purchase will be subject to health underwriting and will be subject to higher premiums or not be insured. It’s a risk I’m willing to take. Long-Term Care Insurance Decisions We are part of approximately 7.2 million Americans who own long-term care insurance. We were lucky enough to buy in the 1990s when we were still in our 50s and in excellent health. Although the annual premium has gone up from about $2,400 to about $4,100 for me (and a similar amount for my wife), the benefit is also about 50% more due to built-in inflation compounding. We have access to a combined benefit amount of over $700,000 and if only one of us needs service, the service provider will send us about $80K a year. It covers an actual risk as opposed to a small annual risk for a Medicare supplement. How is it that many Advisors think Medicare Supplement Insurance which covers a very small risk is OK, but LTCI Insurance which covers a large risk is a “Maybe”? Could it be that many advisors simply do not understand the risk/reward of these coverages? Advise for turning 65 What type of advice should an adviser give to couples turning 65? It depends of course. Someone with chronic medical conditions would likely benefit from a Medicare supplement plan, not to mention the fact that they would be uninsurable for LTC insurance. Check out this comparison for a 65-year-old Illinois couple below who didn’t have the foresight to buy LTC insurance at a younger age. Not surprisingly, the leverage for LTC insurance is higher because there are fewer small claims. Circumstances may vary, but for an affluent couple who can afford some out-of-pocket, it may be smarter to choose LTC insurance. What do you think? Did I Make a Smart Decision to Drop My Medicare Supplement Coverage? Interested in more infographics? There are some long-term care services that Medicare will cover, and it’s in your best interest to know your options regarding care if you need it. Here, we’ll discuss the types of long-term care Medicare coverage, how to qualify for this coverage, and how you can get help covering the costs.
Medicare Vs Medicaid
Medicare will cover some long-term care services, such as home care and short skilled nursing facility stays when you meet specific guidelines. However, some aspects of long-term care (LTC) do not have Medicare coverage, such as nursing homes, custodial care, and assisted living facilities.
Medicare will not cover long-term care unless it is only for a short period of time and under certain circumstances. Part A inpatient deductibles and coinsurance apply. Once you exhaust your lifetime reserve days, Medicare stops covering the cost.
If you are concerned about long-term care costs in the future, it is best to purchase an LTC insurance policy.
Medicare Part A does cover a short-term stay at a Skilled Nursing Facility (SNF) if you have a qualifying inpatient hospital stay. The cost of your care depends on how long you stay at the facility.
Sanders’ ‘medicare For All’ Expands Long Term Care Benefits
For Days 1 to 20: Part A covers the entire cost, and you have a $0 per day coinsurance
It is not mandatory for Part C plans to offer LTC coverage. However, many Medicare Advantage plans offer these benefits. Part C plans may cover benefits outside of Original Medicare, such as transportation, personal care, adult day care, and meal delivery.
Most Medicare Advantage plans do not cover the cost of room and board at an assisted living facility. Part C also does not cover the cost of activities of daily living.
Medicare Advantage plans vary by zip code; it is essential to compare the options in your area. Every Part C plan is different. You may need to stay in-network to qualify for coverage. There may also be out-of-pocket costs.
Paying For Long Term Care
Medicare supplement insurance plans only cover long-term care Medicare coverages. So, if Medicare approves the claim, the insurance policy will approve their portion of the claim.
The easiest way to get LTC insurance is to buy a policy through a private insurance company. Costs and benefits vary between plans, but this type of insurance usually pays for things that Medicare won’t cover.
Medicare covers home health aides when you meet qualifying conditions. Home health care coverage is only available part-time or intermittently. Care must be medically necessary, and your doctor must submit an order for you to receive this care. Medicare does not cover help with activities of daily living such as toileting, bathing, dressing or eating.
Medicare covers home care from a Medicare-certified agency. But Medicare will not cover an independent caregiver, private therapist, or private nurse. However, Medicare Advantage plans in certain areas may include coverage for a caregiver.
Seniors Tend To Quit Medicare Advantage When Health Declines
Medicare will not cover the cost of an adult day care center. However, seniors who get financial assistance or respite care through Medicaid may qualify. Medicare and Medicaid beneficiaries can receive care through the Program of Comprehensive Care for the Elderly (PACE) and may be eligible for an adult health care center.
Medicare covers everything you need related to a terminal illness. Original Medicare will even cover up to 5 consecutive days of palliative care costs for hospice patients.
Low-income beneficiaries may be eligible for Medicaid. The Medicaid program varies by state, but all states must have a program that covers long-term care in a nursing home. Contact your local Medicaid office to see if you meet the eligibility requirements in your state. The State Health Insurance Assistance Program (SHIP) is another resource for Medicare coverage counseling.
A plan is a great way to keep your costs down when Part A coinsurance and deductibles would otherwise be your responsibility. Our licensed agents are here to answer your questions regarding long-term care insurance and coverage.
Texas Nursing Home Medicaid Eligibility
Call us at the number above to speak with an agent now. Or fill out an online rate comparison form to see your plan options.
Lindsay Malzone, Lindsay Malzone is the Medicare editor for. She has been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries about all of their Supplemental Medicare
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