Lost in the headlines around inflation and oil prices is yet another financial strain, this one focused on older Americans: premiums on long-term care insurance, which for some are spiking.
Long-term care insurance is designed specifically to cover home care, assisted living, and nursing home care for those who can’t take care of themselves. Nearly 70% of those of us over 65 will need such care at some point in our lives. Women need care longer (3.7 years) than men (2.2 years). One-third may never need long-term care support, but 20 percent of today's 65 year-olds will need it for longer than 5 years (U.S. Department of Health & Human Services).
Premium increases, some reportedly approaching 300%, are related to factors beyond simple inflation. These factors include the rising cost of care, longer lives, and other flawed assumptions on which the coverage was based.
Roughly 2 in 5 of our Kendal at Home Members have long-term care insurance and subscribed to it long before joining us. Some of these Members are being offered buyouts as an option to a pending premium increase, reflecting the fact that many long-term care insurance programs are chronically losing money. Many policy holders have concerns about how these policies work. When can I receive benefits? What triggers reimbursement? What’s the risk of opting out?
As you can see, this is a complicated topic. If you’re a Member who has questions about your long-term care insurance, please ask. We are more than willing to meet with you about the rate increases, buyout offers, and the pros and cons of continuing to pay premiums. We have enlisted professional actuaries to help you navigate your concerns and options.
While some Kendal at Home Members do have long-term care insurance, others joined our community in lieu of long-term care insurance, preferring our assurance of true care management. We’re also eager to help you understand your options if you’re not a Member but are currently shopping for long-term care insurance or already have it.
Until then, please let me clarify some points:
Kendal at Home is not long-term care insurance. But we provide many of the same benefits and more. We provide planning for healthy aging, care coverage, and care management, which includes getting to know your health concerns and scheduling, paying for, and personally coordinating medical care of any kind – short or long-term – starting the instant you need it. It’s more comprehensive than long-term care insurance and in some cases complements it by filling gaps in care.
These long-term insurance care gaps may include:
The “elimination period”
This is equivalent to a deductible. With most long-term care insurance policies, you need to pay for your own care for the first 60, 90, 100 or more days of need. So, if you were to break a leg and need help eating, bathing, toileting, changing clothes, etc., you pay for it out of pocket until the elimination period is over. In the best case, by the end of the elimination period you’ll have healed and resumed your normal life even though you received no benefits. In the worst case, your illness or injury has become a chronic issue and you received less than adequate care during the elimination period. In other words, you had a worse outcome because you were forced to wait for covered care.
With Kendal at Home, there’s no elimination period. If you become a Member today and you break your leg or develop a chronic disease tomorrow, we initiate care on day one. Outcomes are generally better if you get proper care from the start. This distinction helps explain why our rehospitalization rates are under 3%; the national average is 20%.
Proof of need
To qualify for payment under long-term care insurance, you typically need to prove your inability to perform two or more activities of daily life (ADLs) such as eating, bathing, toileting, dressing, moving from one place to another, etc., before you’ll trigger coverage. You will need doctors’ statements documenting your disability, and the definitions can be restrictive.
For example, if you can manage to get a spoon from a bowl to your lips, you’ll likely be considered able to eat in the context of a long-term insurance claim. But as everyone well knows, eating requires grocery shopping, kitchen organization, prepping, cooking, and plating as well as getting the spoon to your lips. This is how we at Kendal at Home define ability to eat.
So if a Kendal at Home Member cannot perform these important eating-related activities, we will support you with meal services or a caregiver who's going to buy the groceries, prepare the meals, and make sure that the meals actually get to you.
“Care coordination” semantics
Insurers claim to provide care coordination, but what that often means is taking your call, explaining the terms of a policy you’ve been paying for, and maybe dropping by your home to audit your physical abilities and home environment after your elimination period has ended. For us, care coordination is an important, very personal job that involves one-on-one care planning, scheduling, monitoring, paying, coordinating, assessing, and managing.
Kendal at Home provides you with a skilled Care Coordinator from day one of your need. Our Care Coordinators have access to a network of service providers and get to know you and your preferences while you are healthy, not when you start needing care. Kendal at Home also holds wellness events to help keep you active and healthy.
Payment vs. reimbursement
Insurers don’t pay for care as much as reimburse you for charges you’ve incurred. And the claims process often requires patients to submit extensive paperwork. That’s at a time when they’re often physically and mentally unable to do so. We schedule and pay for the care and handle any required paperwork while you attend to your health concerns. If your costs exceed your daily member benefit, you get the care and we invoice you. We don’t deny you the care.
As you can see, long-term care insurance and Kendal at Home address many of the same needs but in different ways and to different degrees. Please call (440.835.8681), email, or speak with your Care Coordinator to learn more.