A Caregiver's Guide to Long-Term Care Insurance

Oldlamplighter

A Caregiver's Guide to Long-Term Care Insurance

Oldlamplighter

As a caregiver for my mother for ten years, I really don’t know what we would have done without long-term care insurance which enabled us to pay for home aides and other in-home caregivers over the course of seven years. As Mom’s health declined from dementia and diabetes, my goal as her primary caregiver was to keep her in her home at all costs.

Mom was a highly intelligent and intuitive person. One of the smartest things she ever did was purchase a long-term care (LTC) insurance policy from a major carrier 25 years ago when she was 70. She was 96 when she passed away. Unlike today, LTC policies were popular and people were buying them because the premiums were not out of sight. More than 100 companies used to sell it. That number is now 15, according to AARP, and only about 7.2 million Americans have long-term care insurance. The average premium today is $2,700, which was what my mother was paying 10 years ago. Can you imagine what she would be paying today?

What is long-term care insurance?

Long-term care insurance is a private insurance policy that can be used to pay for long-term care services, including home modification and in-home care, not covered by health insurance, Medicare, or Medicaid.

Is long-term care insurance worth it?

In short, yes. I purchased a policy twenty years ago at age 50, and premiums were very reasonable. But as I approach 70, my cost will be going up considerably. Frankly, I will do my utmost to keep it as it’s a vital investment in my old age. I’ve seen just how much the right policy can pay out. It can also make the difference between caring for a loved one at home or placing her in a nursing home or memory care facility. Crucially, Medicare does not cover long-term care whether at home or in a nursing home. This is all based on my personal experience. Before purchasing long-term care insurance, it would be a good idea to carefully review your finances or consult a financial advisor to determine how premiums for such a policy fit in with your budget.

What does long-term care insurance cover?

Many people have enough resources so they can afford care at home for their loved ones without long-term care insurance. Most people do not and, if unprepared, are faced with having to depend on Medicaid with the loved one impoverished to qualify. Caregivers are expensive, but not as expensive as nursing and other care facilities, particularly if round-the-clock care is not needed.  

When Mom became eligible for benefits from her long-term care policy and had passed the exclusionary period, we knew we’d have to hire more help. Based on our experience, there are two basic approaches to in-home care based on what long-term care insurance will cover:

Home health agencies

You can go the route of home aide and caregiver provider companies or agencies, many of which are nationwide chains. They send available aides to care for a loved one in shifts that may range from several hours to 12 or 24, depending on the need and condition of the client. They may send their employees to nursing homes or a client’s own home. The advantage is that a primary caregiver seeking help caring for a loved  one uses the agency to do all the work such as vetting, seeing that a home aide has the proper qualifications and credentials, paying the home aide, scheduling shifts and providing insurance. The disadvantages to this most common approach are obvious. You never know who a new home aide will be or whether they will be compatible with a client, and you are at the mercy of the agency. Furthermore, caregiver pay is low and, as a result, turnover is high.

Independent caregivers

The other main approach is the one I took with Mom. I sought to avoid agencies because I wanted control and say over who worked with Mom. I used word-of-mouth to get recommendations. I would call and set up interviews, gather credentials and references for leads, and generally rely on my own intuition and judgement. We got lucky--or should I say, God was looking out for us--because in seven years I only had to let one aide go. The other six were with us an average of four years, and two of them stayed for six. They got to know us very well. They became like family, and Mom was very comfortable with them. This most likely won’t happen with an agency referral, though it could. 

I was also paying considerably more than what our aides could get through an agency, so they preferred the kind of employment I could offer. As I said, we were fortunate and blessed. Not everyone has such positive experiences. I was responsible for checking to see that our hires had home health aide certification that was up to date or two or more years working as a home aide. I had to keep track of all of my caregivers’ schedules and time sheets which were submitted to the LTC insurance company so I could be reimbursed. 

It sounds like a lot of work--and it was--but it was manageable for me because I would have made any sacrifices I could to keep Mom comfortable and at home. Mom was very attached to our caregivers who had been with her a long time. I liked working with them, and they truly became family to us. I had a lot of positive and informative conversations and interactions with them. Most had also worked for agencies, and some still did, taking other jobs as well as working for us. I learned so much from their many years working with clients, many of whom had dementia like Mom. They were all part-time and worked no more than 20 hours a week for us, often less than that. But again, I can’t emphasize enough how unique each caregiving experience is. I make no claim to be an expert. This is all based on my experiences alone. Those experiences, while deeply painful and difficult at times, enriched my life enormously and for that I am forever grateful.

Making the most out of long-term care insurance.

If you’re thinking about getting long-term care insurance, here’s what you need to know based on my experience:

  • Research before purchasing a policy. There are plenty of good resources online including these articles: 
  • Purchase a policy as early as you can, such as in your early 50s to early 60s. After 70, premiums are markedly higher if you can get a policy in the first place.
  • Consider a hybrid policy that utilizes other forms of insurance such as life insurance. Also think about discounts when purchasing couples policies.
  • Read the fine print and make copies of the polices for other responsible family members so they are aware of what is available to their loved ones when they can no longer care for themselves at home alone.
  • Keep paying premiums. If you stop, you’ll lose everything you’ve paid into the policy.
  • Know the exclusionary period before the insurance company starts paying benefits. We had to pay the costs of our first part-time home aide for a year and then we started getting reimbursed by the insurance company. Fortunately, Mom did not need extensive help at that time.

What I did is not for everyone. One of the reasons the caregiver aides were so loyal was not only that they came to love my mother, but they also had a tremendous amount of help from me--especially as her mobility and incontinence got worse. I would absolutely choose to do it this way again. Mom certainly was happy with the people who cared for her.