Long Term Care Insurance Coverage

According to the National Council on Aging, Americans are living longer.

However, these longer lives can still experience the common aging process in diminished capacities with dementia or any one of the other memory loss syndromes or diseases.

Our parents and siblings are living longer, but are less likely to be able to remain in the home. As they age, and with increasing regularity, they are unable to perform activities of daily living, presenting the need for attentive care and engagement. This can obviously create extremely high out-of-pocket expenses. Additionally, special needs siblings and children are aging, which deepens the need for proper risk management to carefully purchase transfer mechanisms– the various options to trade control of assets– for some of these high-cost living situations.

Challenges in Long Term Care

One of the challenges? The myriad of cognitive issues that so many of our community members are experiencing. Some families are safe to self-insure, or what is defined as having no 3rd party insurance and assuming all costs, paying out of pocket until assets are completely diminished. This is often because there may be plenty of healthy and available adult children of the impaired person to take turns managing direct and indirect care.

Some families rotate their most mature members among their homes so that others get respite from these loving but exhausting acts of service.

Some children of the one in need of care in question have time, energy, experience, room, and resources to take turns.

Some families, though, have none of these and are forced to pursue other means of care for their loved one.

Another interesting fact: sometimes, while these folks may have recent memory functionality issues, they still remain fluid and engaging when the topics turn to historic events, often considered the “best of times” from their point of view.

One of the fascinating consequences of progressive cognitive impairments, though, is that as often as not, those experiencing them get physically healthier over time! When they seem to be lost from the present, they often begin walking. And walking. And walking more.

They eat less, they often laugh more, and while their memory is silently slipping away to a painful degree, their bodies trim down and their life expectancy lengthens.

One of the undesirable elements of the process is that the cost of living obviously increases as they

Require a living situation that provides a higher amount of observation by family or a facility staff member/technology, which clearly costs more, and
Live longer and longer due to the improvements in their health situation.

What a challenge.

Long Term Care Insurance in Oregon

Long Term Care Insurance is making a resurgence, as most families don’t want to rely on the family assets to cover the costs, but instead are investing in individual or couples’ policies to get help paying for the needed care, thereby preserving the hard-earned legacies created.

The long-term care market in Oregon is highly regulated by the state for two factors: Sales practices (by agents and brokers) and claims paying practices (by the actual insurance companies themselves).

A terrific resource that our Oregon State Department of Financial Regulation provides to us is a relatively simple complaint submission and investigation process, which we all pay for out of tax funds.

For example: In Oregon the market is served by approximately 74 sources of long term insurance providers, 21 of which are dominant. Annually, this consumer protection agency provides a list of most all providers in the market and provides a “complaint index” by which to compare options. These factors have to be considered in order to make a careful and likely solid decision.

A link to our Oregon “Insurance Industry” complaint data official website webpage can be found at: https://dfr.oregon.gov/help/complaints-licenses/Pages/complaint-information.aspx

Notice that consumer data is broken down by year and type of insurance, which just happen to include Annuities, Auto, Health, Homeowners, Life, and Long-Term Care. The key to a reasonable understanding of what you are looking at is: the definition of “complaint index”.

So, while our friends at State Farm have substantial market share of the personal homeowners and auto premium in the state, the complaint index considers this, ensuring that all carriers are judged on equal fairness. Premium volume, of a percent of total, is weighted so that fairness is provided to those insurers, and also in easy to understand numerical reference numbers.

Resources to Review & Questions to Ask When Seeking Long Term Care Insurance

I digress to Long-Term Care insurance! When discussing with a licensed Long-Term Care Insurance agent, there are many factors to consider with respect to coverage triggers, benefits, deductibles, waiting periods, preferred providers, family member care, etc.

Before you get too far into the process, take a few minutes to get grounded in costs in your local area! A great starting point is: https://www.oregon.gov/dhs/seniors-disabilities/LTC

Another research tool is to know how Long-term care facilities are held accountable. Oregon complies with federal requirements for expectations of a certain level of transparency and advocacy for senior residents and, in some cases, their families. It makes sense to know the rules before the game begins, right?

A great resource to pursue this group of topics is: https://aspe.hhs.gov/sites/default/files/private/pdf/110586/15alcom-OR.pdf

When it comes to the actual insurance policy coverage, be prepared to ask some key questions of insurance company representatives:

What facilities in my area qualify?

How are they “rated”?

How are insurance premiums paid?

Can these premiums be increased without my knowledge?

What if the family member won’t move to a “nursing home”? What about Home Health Care? Is it covered? What benefit amount?

What are the upper, lower, and average costs of care in my area?

If my family member’s health and/or cognitive situation changes for the better or worse, does a particular facility have the support available that the resident may simply be moved to another wing, floor, or area to minimize the number of shocks to their system and labor required by remaining and available family members and friends?

How much coverage can the elder qualify for?

What are the normal “activities of daily living”? (ADLs) What constitutes “can’t perform”?

How many ADLs must be lost before coverage on a policy is triggered?

How does the senior get approved for coverage?

Is genetic disposition considered, even if no symptoms are present?

Is the insurance program prosed highly financially rated? Proof please.

What are the specific care benefits of the policy?

What are examples of normal waiting periods? 30 days? 60 days? 90 days? 180 days?

Length of coverage available?

Can we get a lifetime-length policy if we can afford it?

How long do men live in facilities vs. women?

Are cost of living increases available?

Are their maximum total allowable benefits in the policy? Do Home Health Care benefits diminish formal facility coverage benefits?

Can a family member get paid to be a caregiver? If certification of that person is required, can the carrier cover the cost of certification?

Consider Long Term Care Insurance Sooner Rather than Later

As in any comparative process, get multiple proposals and make a deliberate attempt to compare them side-by-side so as to not get lost in the minutiae and regret the outcome. Once a person has been hospitalized, is losing memory, is combative, and/or is of a substantially advanced age, replacement coverage is highly, highly difficult to obtain.

When working with a trust attorney to ensure these family members have their basic and nurturing needs met, considering options makes sense. Legacy matters to most elders, so it is reasonable that they would like to manage the risk of coverage Long-Term Care carefully.

One of our agents can sometimes assist in combining risk transferring via other, new, or existing policies.

For example: Adding critical illness riders, living benefit life insurance advancements, face amount cash value loans, etc. to lower financial risks commonly experienced within policies. Don’t assume it is unaffordable, but don’t wait until too old to obtain qualified offers from multiple insurance carriers.

If this is all getting more and more confusing, you can contact us to review your policy, get new presentation options, or discuss available discounts by calling us at 541-482-0831, or request a quote online.

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